Shares of Larsen & Toubro gained over 2% in an otherwise weak market today after Morgan Stanley assigned overweight stance to the stock. It also raised target price to Rs 2827 from Rs 2401, an increase of 18%. The US financial MNC said it saw strong evidence that the capex cycle was gaining momentum and believed long-cycle and diversified EPC firms such as L&T are strongly positioned. “We now apply a 25x P/E to L&T’s core business, up from 20x previously,” it said.
“L&T is a natural monopoly in its business given its scale. Despite its size differential, it compares favourably to its peers on the lines of order inflow growth, a diversified order book, improving execution and revenue growth, lower volatility in margins, and well-managed working capital,” the brokerage added.
Sentiments on the L&T counter were also upbeat after the ministry of defence inked a Rs 3,100-crore contract with firm for procurement of three cadet training ships. The ships will cater to the training of officer cadets at sea after their basic training to meet the future requirements of the Indian Navy.
Subsequently, shares of L&T gained up to 2.27% to Rs 2,189 against the previous close of Rs 2140.60 on BSE.
The stock of the infra major has gained 3.38% this year and risen 30% in the last one year. Total 0.31 lakh shares of the firm changed hands amounting to a turnover of Rs 6.64 crore on BSE. Market cap of L&T rose to Rs 3.03 lakh crore.
In terms of technicals, the relative strength index (RSI) of L&T stands at 46.9, signaling it’s trading neither in the overbought zone nor in the oversold zone. L&T stock has a one-year beta of 1, indicating average volatility during the period. Jindal Stainless shares are trading higher than the 5 day, 50 day, 100 day and 200 day moving averages but lower than 20 day moving averages.
The stock hit a 52 week high of Rs 2297.30 on January 20, 2023 and a 52 week low of Rs 1456.80 on June 20, 2022.
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