Time period given by analyst is one year when Larsen & Toubro Ltd. price can reach defined target.
Larsen & Toubro Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 224399.68 Crore) operating in Construction sector.
Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 29982.70 Crore, down -38.96 % from last quarter Total Income of Rs 49116.16 Crore and up 36.05 % from last year same quarter Total Income of Rs 22037.37 Crore. Company reported net profit after tax of Rs 1556.18 Crore in latest quarter.
Investment Rationale
The brokerage maintains earnings estimate, but increase TP to INR1,835 (prior: INR1,700), driven by MTM of the CMPs of the listed subsidiaries (Holdco discount of 20%) and an unchanged target PE multiple of 20x on the core business. It estimates an FY21–24E EPS CAGR of 24%, driven by a 15% CAGR in the core E&C business and declining loss from the Hyderabad Metro. Adj. for the subsidiaries’ valuation (~INR740/sh), the core E&C business trades at an FY22/FY23E PE multiple of 18.0x/15.7x v/s the historical one-year fwd avg. PE multiple of 22x. Should the stock revert to the historical average trading multiple of 22x, our TP would increase to ~INR1,950 on the stock. L&T remains the best play on the capex cycle in India.
Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2021, while FIIs held 24 per cent, DIIs 32.5 per cent and public and others 43.5 per cent.
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