21 August, 2014 17:35 IST
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`Buy` L&T; target Rs 1,607: Angel Broking
Source: IRIS Exclusive (05-MAR-12)
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Angel Broking has maintained `Buy` on Larsen & Toubro (L&T) with a price target of Rs 1,607 in its report dated March. 05, 2012. The broking house gave the following rationale:

Larsen & Toubro`s (L&T) construction arm bagged new orders worth over Rs 13.06 billion under various divisions during February 2012. The power T&D segment secured orders worth Rs 5.14 billion from various clients, which includes a major order from Power Grid Corporation for the construction of a transmission line. The buildings and factories division won orders worth Rs 4.51 billion for the construction of residential towers and for civil, structural and mechanical erection works for the construction of a cement plant. L&T construction also secured an order worth Rs 2.2 billion for the construction of 23MW Solar PV plant on EPC basis in Rajasthan.

Lastly, Rs 1.21 billion order was received from Kolkata Metro Rail for the construction of 2.7km viaduct, station building and other related works.  

At the CMP of Rs 1,299, the stock is trading at PE of 18.3x FY2013E earnings, which is below the historical trading multiple for L&T. We have used the SOTP methodology to value the company to capture all its business initiatives and investments/stakes in the different businesses. Ascribing separate values to its parent business on a P/E basis and investments in subsidiaries on P/E, P/BV and mcap basis, our target price works out to Rs 1,607, which provides 23.7% upside from current levels. Hence, we maintain our Buy rating on the stock.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.



Larsen & Toubro Limited   (Q,N,C,F)*


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