Larsen & Toubro Stock Prices – Shareholding Pattern, Charts & Stock details

L&T Stock Info

  • Government Gung-ho on Infra-Projects: Larsen & Toubro (L&T), reported strong Q1FY20 earnings on back of spending driven by Government push on construction & infra projects.
  • Strong Earnings: In Q1FY20 for continuing operations L&T registered a Consolidated Gross Revenue growth of 10% and Consolidated PAT growth of 20.50% (Y-o-Y). Importantly, operating margins improved by over 200 (bps); primarily driven by cost efficiencies, better capacity utilisation and capability enhancement.
  • Sizeable Strong Order Book: Consolidated Order Book of the group stood at Rs.294,014 crores as at June 30, 2019, international Order Book component being 21%. This gives revenue visibility of 2 years at constant top line.
  • New Order Wins: The Company successfully won new orders worth Rs. 38,700 crores at the group level during the quarter ended June 30, 2019 a growth of 11% (YoY). Order inflows mainly came from Infrastructure and Power segments.
  • Infrastructure Mainstay of Order Book: Around 75% of the order is from Infrastructure segment, which stands at Rs.2,18,825 crores as at June 30, 2019. General Elections through and a firm mandate for pro-incumbency we expect Government to push harder infra-projects be it infrastructure development, rural electrification, airports, railroads, water supply and irrigation.
  • All segments to fire now: Key revenue contributors are infra-projects (~50%), IT&ITES (10%), Hydrocarbons (11%) & Financials (9%) while at PBT contribution from Infra-projects (34%), IT&ITES (20%) ,Hydrocarbon (7%) and Financials (19%). Profitability and blended margins are primarily driven by Financials and IT services and both these segments are on high growth trajectory.
  • Monsoon Fury: It’s unfortunate but parts of Maharashtra, Kerala, Andhra Pradesh, Karnataka and Gujarat have been devastated by floods. Restoring normalcy will require significant rebuilding of infra-structure, roads, water pipelines, electrical line and Civic amenities.
  • Financials: The Company has delivered Consolidate Revenue Cagr of 11% and PAT Cagr of 16% in preceding 5 years. It enjoys ROE of around 17.50% and its long term debt to equity ratio is 1.22. We expect profitability to pick up momentum going forward.
  • Valuation: Decent Monsoons so far, greater infra push by Government, monetary policy easing and improving economy augurs well for L&T. We expect the present of momentum of Q1FY20 will continue over FY20 & FY21.Assuming, L&T to deliver Consolidated PAT Cagr of 20% over next couple of years, translates into an EPS of Rs.105. It is presently trading at PER of 20.53x and P/BV of 2.96 on ttm basis respectively which is at a discount from mean levels.
Valuing the company at a PER of 20x FY21e, per share target price comes at Rs.2100.

L&T Segmental Revenue & PBT

L&T Segmental Revenue & PBT

L&T 5 Year Revenue CAGR PBT CAGR

L&T Valuation Bands

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