Larsen & Toubro - ACCUMULATE - TP Rs.1337 - Result Update - Kotak

- L&T reported mixed set of numbers. While revenue growth was tepid, there was surprise gains on the margin front, which beat our PAT estimates by a wide margins. However, order intake came in lower than estimates due to continued deferment of major orders in the domestic market. The company had to revise sharply downwards its order intake guidance for FY18. There was also some deterioration on the balance sheet metrics (decline in cash from operations and increase in borrowings).

- On forward earnings basis, L&T is trading at 22.9x and 19.1x FY18 and FY19 earnings respectively. While valuations are reasonable but the growth outlook is also tepid. Hence, we maintain "Accumulate" rating on the stock (BUY on declines).

- We value the stock at 22x FY19 earnings and arrive at a price target of Rs 1337 (Rs 1274 earlier). Due to moderate upside, we maintain "Accumulate", thereby advising clients to buy on declines

Shares of LARSEN & TOUBRO LTD. was last trading in BSE at Rs.1207.8 as compared to the previous close of Rs. 1209.85. The total number of shares traded during the day was 122266 in over 5772 trades.

The stock hit an intraday high of Rs. 1224.75 and intraday low of 1202. The net turnover during the day was Rs. 148586035.

Source : Equity Bulls

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