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Yes Securities Report
Larsen and Toubro Ltd. reported a mixed set of numbers with 34% YoY revenue growth on the back of robust performance of the Infrastructure, Hi-tech manufacturing, energy projects and IT&TS business.
During Q1, L&T recorded order inflow of Rs 655 billion, up 57% YoY led by large order wins from rail, renewables, rural water supply, transmission and distribution, IT and office space and onshore and offshore verticals of the Hydrocarbon business.
Order book stands at all-time high of Rs 4.1 trillion (2.1 times trailing twelve months revenues) providing a strong revenue visibility for next two-three years.
Management indicated that order pipeline for rest of FY24 stands healthy at ~Rs 10 trillion with good traction witnessed in sectors such as Hydrocarbons, roads and expressways, water, renewables, power transmission and distribution etc.
On the international front, with pickup in economic activity in GCC led by stable crude prices, management is witnessing strong traction in order inflows in both oil and non-oil segments.
We believe that L&T is well-placed to emerge stronger given its financial, technical and managerial capability for sustaining and gaining market share.
At current market price, the stock is trading at 25.6 times/17.9 times FY24E/FY25E earnings.
We remain positive on the company's strong business model, robust bid pipeline, diversified order book and healthy balance sheet. We maintain our 'Add' rating a revised SOTP-based target price of Rs 2,848.
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