Shares of Larsen & Toubro (L&T) were trading near their 52-week high today after the infra major reported a strong set of earnings for the quarter ended September 2022. L&T shares were trading 2.51 per cent away from their yearly high of Rs 2078.2 on BSE today. The stock was trading 0.06 percent lower in the afternoon session at Rs 2,022.70 against the previous close of Rs 2,023.95 on BSE. The stock has gained over 8 per cent in the last six days.
The large cap share is trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
In one month, the stock has gained 9.28 per cent. Market cap of the firm rose to Rs 2.84 lakh crore. L&T stock price has risen 3.71% in a week. The share has climbed 12.5% in one year and gained 6.61% since the beginning of this year.
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The infra major reported a 23 per cent year-on-year (YoY) rise in consolidated net profit at Rs 2,228.97 crore in Q2 led by a strong performance in the IT & Technology Services (IT&TS) and Financial Services businesses.
The company had logged a profit of Rs 1,819.45 crore in the corresponding quarter last year. Consolidated revenues for the quarter rose to Rs 42,763 crore, up 23 per cent YoY, led by execution tailwinds in the infrastructure projects segment and sustained growth momentum in the IT&TS portfolio, the company said in a BSE filing.
International revenues for the quarter stood at Rs 15,473 crore and accounted for 36 per cent of L&T’s total revenue. Larsen & Toubro said it received orders worth Rs 51,914 crore at the group level for the quarter ended September 30, rising 23 per cent YoY.
The orders received during the quarter were across multiple segments like Public Spaces, Nuclear Power, Irrigation, Ferrous Metal, Health, Renewables and Refinery sectors. International orders at Rs 17,341 crore during the quarter comprised 33 per cent of the total order inflow.
Here’s a look at what strategy investors can adopt post the Q2 earnings of the company.
Amit Anwani, Research Analyst, Prabhudas Lilladher has given a target price of Rs 2030 for the stock.
“We believe that L&T is well-placed to benefit from overall diversified tender prospects with 1) better order conversion in domestic market, 2) significant traction in capex from oil exporting countries mainly in hydrocarbon segment and 3) expected uptick in the private capex,” said Anwani.
“At the current market price , the stock is trading at a PE of 26.6x/23.1x/19.8x FY23/FY24/25E. We have a buy rating on stock with a target price of Rs 2,030, Anwani added.
Credit Suisse has assigned a target price of Rs 2,250. It sees stronger traction on domestic execution and inflows bode well. The stock is available at reasonable valuations. The company enjoys cyclical benefits and has also seen progress in divestment of non-core assets.
Bernstein has assigned a buy call to the stock with a target price of Rs 2,200. The earnings beat consensus on all metrics by a sizeable margin, except net income (where it was in line) – supported by strong execution and good order inflow. “The company is on track to meet upper end of order-inflow and revenue guidance for FY23,” the Private Wealth Management firm said.
