Larsen & Toubro (L&T), an engineering and construction conglomerate, announced Friday a rise of 69.17% in net profit to Rs 27.23 billion for the quarter ended Mar. 31, 2014 as compared to the same period last year. Analysts, on average, had expected L&T to report a profit of Rs 17 billion.
Net sales of the company rose 11.08% to Rs 200.79 billion for the quarter ended Mar. 31, 2014 from Rs 180.76 billion in the year ago period. Market was expecting profit to come at Rs 209.6 billion.
Chirag Shah, analyst, ICICIdirect, said, ''New government's focus on revival of capex cycle will benefit L&T most. Even on downside, L&T is comfortably placed given strong order intake and diversified exposure. Efforts on asset monetisation have begun and will positively impact RoEs. We upgrade the target price from Rs 1,162 to Rs 1,752 and increase the base business multiple from 15x to 20x. We maintain Buy rating.
While, Amit Patil, research analyst, Angel Broking, said, ''For 4QFY2014, L&T reported flat yoy growth in top-line to Rs 200.79 billion. Infrastructure segment reported robust growth of 17.6% yoy to Rs 135.39 billion. Net profit has been adjusted for exceptional gain of Rs. 4.84 billion on account of stake sale in subsidiary company. The company has a robust order backlog of Rs 1,630 billion at the end of FY2014. Further, the management is confident of achieving 20% yoy growth in order intake in FY2015. We maintain our positive stance on the company.''
''FY14 OPM expanded by 127bps YoY to 11.8% and revenues grew by 10% YoY. Hydro carbon (HC) reported dismal OPM of 3%. Including HC, FY14 OPM was down 50bps to 10% and sales grew 9%. Net working capital has increased to 22% of sales (from 17% in 4QFY13). Management sounded very optimistic and expects huge opportunities to come up in India from 2HFY15 onwards. Middle East too remains a focus area. Retain BUY with a SOP based TP of Rs 1,700,'' said, Abhinav Sharma, HDFC securities.
Misal Singh, Religare Institutional Research, said, ''Infrastructure segment revenues were up 17% YoY to Rs 132 billion in Q4FY14 on execution of a strong carry-forward order book, while metallurgical & material handling/power segment revenues slid 5%/29% YoY to Rs 17 billion/Rs 15 billion on a lower order book position. We value the standalone business at Rs 1,165 (target P/E 18x) and subsidiaries at Rs 535. Maintain HOLD on limited upside even as we see some upside risks to our estimates.''
Satyam Agarwal, Motilal Oswal, said, ''L&T's 4QFY14 operating performance in-line, with Revenues at INR201b (up 11%) and adjusted EBIDTA at Rs 27.5 billion (up 22%, post forex gains). L&T is exposed to several levers across business/geographic segments and has emerged as the E&C partner of choice in India, which provides a robust foundation to capitalize on the next leg of investment cycle. Maintain Buy with a revised SOTP based price target of Rs 1,850/sh (22x FY16E).''
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