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L&T shares surged as much as 6.7 per cent to Rs 1,384 in their biggest daily percentage gain since August 20. The stock was the top percentage gainer on NSE index.
The company’s Q2 profit jumped over 20 per cent to Rs 2,230 crore ($302.11 million), beating analysts' estimates, as it got higher orders during the quarter.
HSBC has raised the price target to Rs 1,535 from Rs 1,660, and has maintained 'buy' rating. HSBC believes the company’s focus on 5-year strategic plan will be value accretive for shares.
L&T has retained its guidance on order inflows of 10-12 per cent during this fiscal and this points to potential risk of order inflow slowdown during H2 as election code of conduct (General elections in 2019) can slow down project awards, HSBC says.
Jefferies has raised the price target to Rs 1,925 from Rs 1,297.50 and has given 'buy' rating. “L&T's share price reflects those few times when risk:reward is favourable, with downside protection from execution ramp up and upside from capex recovery,” Jefferies says.
According to Deutsche Bank analysts, water, railways, hydrocarbon and power can support ordering, while core infra orders are likely to be weak in H2.
More than 3.5 million shares traded as of 0417 GMT, 1.2 times their 30-day average of about 2.8 millioin shares. About 24 of 35 brokerages covering the stock rate it “buy” or higher, four “hold” and two “sell” or lower; their median price target is Rs 1,591.50, according to Refinitiv data ($1 = 73.8150 Indian rupees).
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