Emkay Global Financial Services has maintained 'Buy' on Larsen & Toubro (L&T) with target price of Rs 1741 as against current market price (CMP) of Rs 1469 in its report.

Commenting on the investment rationale, Emkay said, ''The stock price has corrected on back of fall in the crude prices by 30% over the last six weeks raised concerns of slowdown in the infrastructure capex in the GCC region, 22% of the order intake came from GCC countries during FY13-YTDFY15E of which 24% came from the hydrocarbon segment

Management does not anticipate risk to execution timelines or profitability of these international projects (except for the onerous contracts in hydrocarbon segment worth Rs40bn) due to the impact of decline in crude prices

However we believe that strong pick-up in domestic ordering has become all the more vital for the stock performance. We also believe that if order tendering edges lower from the GCC region it may compel L&T to bid aggressively in the domestic orders. Maintain Buy with the target price of Rs 1740/share

Key risks to our call will be lower-than-expected domestic order inflows on weaker reforms coupled with sharp overseas ordering slowdown, leading to overall order inflow disappointment. Near term correction should be used as an opportunity to buy the stock.''

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