What investors should do with Larsen and Toubro post Q4 result

Analysts retained their bullish view on engineering and construction conglomerate Larsen and Toubro (L&T) after the company on Friday reported a 3% year-on-year (YoY) growth in consolidated net profit to Rs 3,293 crore for the quarter ended March 31. On the other hand, it posted a 9% YoY growth in consolidated revenues to Rs 48,088 crore.

Shares of the company traded 1.42% down at Rs 1395.45 at around 10.20 am (IST). On the other hand, the benchmark BSE Sensex was up 492 points, or 1.01%, at 49,225 at around the same time.

Should you buy?

Brokerage HDFC Securities maintained a ‘Buy’ rating on L&T with a price target of Rs 1,800, indicating an upside of nearly 29% from the current market price.

“Improvement in EBITDA margin and strong cash collections were the key positives from the result. With improving macro in international markets and government’s focus on infrastructure at home, L&T is hopeful of low to mid-teens growth in order inflow,” HDFC Securities said.

It holds ‘Buy’ on L&T due to its strong order book, healthy balance sheet and robust services business. The company’s order book at the end of the financial year stood at Rs 3.3 lakh crore, up 8% on YoY basis. L&T’s board also approved a final dividend of Rs 18 per share for the financial year ended March 31.

Prabhudas Lilladher revised the target price upwards owing to revision in earnings and target market capitalisation of its holdings companies.

“We believe that L&T is well-placed to emerge stronger given its financial, technical and managerial capability for sustaining and gaining market share. Given the strong tender pipeline and healthy order book, we have revised our earnings upwards for FY22 and FY 23 by 4.5% and 5.8%, respectively. We maintain ‘Buy’ rating on the stock with a revised target price of Rs 1,604 (earlier Rs 1,526),” Prabhudas Lilladher said in a report.