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Buy Larsen & Toubro, target price Rs 1950: Motilal Oswal

Motilal Oswal has buy call on Larsen & Toubro with a target price of Rs 1950. The current market price of Larsen & Toubro Ltd. is Rs 1614.7. Time period given by analyst is one year when Larsen & Toubro price can reach defined target.

Larsen & Toubro Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 224139.83 Crore) operating in Construction sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 29982.70 Crore, down -38.96 % from last quarter Total Income of Rs 49116.16 Crore and up 36.05 % from last year same quarter Total Income of Rs 22037.37 Crore. Company reported net profit after tax of Rs 1556.18 Crore in latest quarter.

Investment Rationale
In the past month, L&T Infotech has rallied ~18%, MindTree ~28%, and L&T Technology Services ~11%. Factoring in the current market prices of the listed subsidiaries (after applying an unchanged holding company discount of 20%), the TP for L&T now stands at INR1,950. Adj. for the valuation of subsidiaries, the core business is available at FY23E PE of 13.5x v/s the long-term one-year forward average PE multiple of 22x. The brokerage maintains a Buy rating. L&T is the top pick in 500 the wider Capital Goods sector as a proxy to play India’s capex story.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of March 31, 2021, while FIIs held 24 per cent, DIIs 32.5 per cent and public and others 43.5 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.

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