Some analysts see a potential increase of 25% over the next 12 months, following quarterly earnings. The company reported a record high quarter in terms of order inflows, primarily thanks to two orders for building high-speed rail.
UBS said in a post-revenue note that L & T’s book-to-invoice ratio was as high as 20 quarters, with high revenue visibility. However, valuations remain tough as the market does not price the rise in market share at the expense of peers, insisting on buying stock. The target is 1,575 rupees.
Net profit was up 5% to Rs 2,466.71, according to L & T on Monday. However, operating revenue was 35,596.42 rupees, down 1.78% year-on-year. Orders for this quarter surged 76% compared to the corresponding quarter of the previous year to Rs 73,233.
Credit Suisse said it maintained an “outperform” valuation of the stock with a target of Rs 1,700 and the results were in line with the estimates. “The outlook is positive with attractive valuations. Valuations can be boosted upwards. Valuations remain attractive despite the rise. With record order bookings backed by bulk orders The momentum continues to be strong. ”
As the company’s chief SN Subramanian confessed, “There are many problems at the moment,” the company still has hope for the future. L & T said it considers the third quarter to be a “turnaround quarter.”
Wednesday’s share price fell 1.3% to Rs 1,343 as the entire market went on sale. Improving the outlook for the infrastructure sector has boosted stock prices by 27% in the last three months.
Nomura analysts Priyanka Chopra and Nirotopal Suff said:
They maintained their EPS estimates for 21-23, but reached a target of Rs 1,616 with minor changes to assess L & T on a SOTP basis. This means a 19% increase. According to them, the major risks are delayed economic recovery, sharp rises in commodity costs such as steel and cement, and increased working capital.
Brokers are also looking to de-leverage the company as collections from public sector orders remain strong. L & T has already reduced its net debt level by Rs 13,100 in the third quarter of the current fiscal year compared to its level in 2008.
The company is already the largest contractor in India, but nowhere compared to its Chinese counterparts, some of the world’s largest construction companies. However, continued market share growth in the domestic and international markets could bring us closer to these levels.
Foreign brokers predict that this powerful contractor will turn into a huge one
https://economictimes.indiatimes.com/markets/stocks/news/foreign-brokers-project-this-mighty-contractor-to-turn-into-a-mammoth/articleshow/80476042.cms Foreign brokers predict that this powerful contractor will turn into a huge one