Comments
Target: ₹3,465
CMP: ₹2,894.35
L&T reported yet another strong set of numbers with stellar 19/45 per cent YoY growth in revenue and PAT driven by better execution in P&M (projects and manufacturing) segment and profit from sale of commercial property in Hyderabad Metro project. Reported PAT is 25 per cent ahead of our estimate owing to exceptional item of profit from sale of property, adjusted for the same, PAT is largely in-line with our estimate. Overall EBITDA margins at 11 per cent are ahead of our estimates but the management has guided for lower margins in FY24 on account of legacy projects.
Key highlight of the quarter was the twin ‘Ultra Mega projects’ bagged by the company in West Asia in hydrocarbon segment.
Overall, order inflow increased by 72 per cent YoY with ₹89,100 crore of inflow in 2Q, taking the total orderbook to record levels of ₹4.5 lakh crore. Given the strong orderbook, robust prospect pipeline of ₹10-lakh crore, controlled NWC environment and improving development business dynamics, we have upgraded our rating on the company to Buy from Add.
We have tweaked our PAT estimates for FY24 and FY25 upwards by 4.8 per cent and 4.7 per cent respectively. We have also moved our valuation to Sep 25 to arrive at our revised TP of ₹3,465 (₹2,892 earlier).
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.