Cheering Larsen & Toubro (L&T)'s better-than-expected September quarter numbers, brokerages and analysts have raised their target price of the infrastructure major.
The company posted healthy topline growth aided by the infrastructure segment. Its revenue climbed 23 percent year-on-year to Rs 42,763 crore. Net profit also saw a jump of 23 percent to Rs 2,229 crore.
An important metric for L&T is its order inflow, which investors keep a hawk eye on. The company won orders worth Rs 51,914 crore at the group level during the quarter and the consolidated order book stood at Rs 3.72 lakh crore at the end of the second quarter of the financial year 2022-23.
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However, on the margin front, the company disappointed. On a consolidated basis, EBITDA margins remained flat at 11.5 percent due to input cost pressure in a few projects.
Credit Suisse has an "outperform" call on the stock, with the target price at Rs 2,250 a share. “Stronger traction on domestic execution and inflows bode well. Valuations are reasonable at current levels,” it noted. L&T’s trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 30.93.
Another global brokerage JPMorgan has an "overweight" call, with the target raised to Rs 2,200 from Rs 2,045 a share. Its analysts estimate return-on-equity expansion to 15.9 percent by FY26 without monetisation benefits
Morgan Stanley, too, has an "overweight" call on L&T with the target raised to Rs 2,305 from Rs 2,178. It has raised FY23-25 earnings per share estimate by 1-8 percent on strong execution momentum.
Jefferies has a "buy" call with the target raised to Rs 2,455 from Rs 2,215. “Management has maintained its 12-15 percent year-on-year order flow and revenue growth guidance. The company should benefit from execution and margin recovery,” it said.
At 10 am, the stock was quoting Rs 2,000 on the National Stock Exchange, down 1.14 percent.
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