Larsen & Toubro Ltd. share price target

Adjusting for taxes and debt, the company is likely to garner net cash inflow of USD1.4b as proceeds. originally announced, and even until the days preceding the COVID-19 outbreak, we expected the proceeds to be utilized for buybacks or put toward a one-time special dividend of INR7080/sh. However, COVID-19 has posed various challenges, including the risk of funding requirements in non-core businesses such as L&T; Finance and Hyderabad Metro. the nature of use of the proceeds may be against the original expectation; however, this has more to do with COVID-19-led risks than any change in the managements intention to return excess cash to shareholders. Owing to the proceeds, L&T; is likely to maintain a strong liquidity position and does not have to depend on debt on a net basis to support core business execution. had already communicated that it may utilize part of the funds to restructure the capital structure of the Hyderabad Metro by replacing external debt.

Larsen and Toubro (L&T;) remains at the forefront to reap benefits from the recentlyannounced Atma Nirbhar Bharat scheme from the government of India with its diversified businesses across sectors like defence, infrastructure (roads, railways, metros, DRC), heavy engineering, IT (digitalisation). In the recent move from the Ministry of Defence, wherein the import embargo was placed for 101 defence items will prove to be beneficial for L&T; as it is already manufacturing more than 50% of the items stated in the first negative list of 101 items. The company have been focusing on the defence manufacturing and have also been ramping up operations (invested ~Rs. 8,000 crore) in the space over the last few year. Further, the government's announcement to create...

Refer to important disclosures at the end of this report Counter-cyclical infrastructure spending to boost the economy not a realistic hope We appreciate your support in the Asiamoney Brokers Poll 2020 Several experts suggest a counter-cyclical infrastructure driven stimulus worth the size of 5-15% of GDP (as compared to estimated direct government-funded spend of below 3% in FY20) to bail out the economy. We took a deep dive into India's fiscal math just as we look at corporate finances to find that India does not...

Given current upside potential, we reiterate our BUY rating on the stock with a revised target price of Rs. 1,154 based on SOTP valuation. Economic disruption impacts performance Q1FY21 consolidated revenue came in at Rs. 21,260cr (-28.3% YoY), as the company saw declines in revenue from its verticals across the board, with exception of IT&TS; which registered a 57.2% YoY growth to Rs. 6,043cr. Among its key segments, Infrastructure revenues stood at Rs. 6,456cr (-53.1% YoY), Hydrocarbon at Rs. 3,070cr (-18.5%) and Financial Services at 3,284cr (-5.1). EBITDA fell 47.2% YoY to Rs....

TVSL's reported mixed set of results where revenues came in marginally lower at Rs14.3bn (-68% YoY, PLe Rs15b). Gross margins too came in lower at 24% (-90bp YoY/QoQ), PLe 27%). However, led by tight cost control, EBITDA loss restricted at Rs488m (PLe loss of Rs649m) while net loss at...

Larsen and Toubro Ltd.'s quarterly Profit misses Estimates, Ordering activity in infra and water to pick up in the later part of current fiscal Larsen & Toubro the engineering construction to software majorhas registered 28% fall in consolidated revenue to Rs 21259.97crore for the quarter ended Jun 2020.Lower sales together with 280 bps contraction in operating profit margin to 7.6%, the operating profit was dragged...

Larsen and Toubro (L&T;) reported decent performance in Q1FY2021 despite challenges. The company's operational performance was broadly in line with our estimates. L&T;'s revenue declined by 28% y-o-y to Rs. 21,260 crore, affected by 53% y-o-y decline in E&C; revenue (33% of revenue). L&T;'s core E&C; was affected by COVID-19 led stringent lockdown hampering project execution. The company lost Rs. 12,500 crore revenue in Q1FY2021 due to the lockdown. Operating profit margin (OPM) at 7.6% was lower by -273 bps y-o-y (marginally lower than estimates) as margins shrank across all segments. E&C; margins dipped by 340 bps to 3.9%, while service margins declined by 875 bps to 10.4% on losses on developmental...

23 July 2020 1QFY21 core operating performance was a welcome surprise as E&C; EBITDA came in 49% above our expectation, despite the low value. Losses in L&T; Finance Holdings offset the strong show in the IT business, limiting consolidated adj. Despite the current crisis, L&T; has impressed with its liquidity management, keeping its working capital and net cash position intact, and taking advantage of the low interest rate scenario. Adj. for the valuations of subsidiaries (we apply 20% holding company discount to market cap of 4-listed entities), the core business has underperformed Nifty by ~20% since the 4QFY20 results (June first week). Maintain Buy. The miss in core E&C; revenue (INR114b, -46% YoY) was more than offset by the margin surprise, thereby resulting in a 49% beat on our EBITDA estimates. Thus, core E&C; EBITDA came in at INR4.4b (-71% YoY), with a core EBITDA margin of 3.

Decent order inflows led by infrastructure & services segment For Q1FY21, L&T; registered reasonable order inflows at the group level worth | 23574 crore, which de-grew 39% YoY, characterised by low interest in fresh investment and order deferrals. International orders for Q1FY21 were at | 8872 crore contributing 38% to order inflows. Overall infrastructure segment contributed 48% to total inflows, which included orders in rural water supply scheme, expressway project and some international orders in power T&D;, mainly from Middle East while services contributed 42% to...