'Buy' retained on L&T – TP lowered to Rs.1425 - Geojit BNP Paribas Financial Services Limited

3QFY12 is a mixed quarter. Revenue growth is good but unsatisfactory margins. Net profit looks good because of higher other income.

There are certain large swing orders that would decide whether the company could meet or miss its targets.

If the company fails to meet its guidance for 4QFY12, the stock price is likely to fall by around 10% (the worst case scenario) from the current level (RS.1275 range)

Considering the probable downside in the above circumstances, the target price is revised to Rs.1425.

Management guidance for FY13 would be the next foreseeable catalyst.

Lower than expected order inflows, higher than expected decline in EBITDA margin and slower execution are risks to the target price.

Source : Equity Bulls

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