Buy Larsen & Toubro, target price Rs 1763: Anand Rathi

Anand Rathi has buy call on Larsen & Toubro with a target price of Rs 1763. The current market price of Larsen & Toubro Ltd. is Rs 1409.7.

Larsen & Toubro Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 197712.32 Crore) operating in Construction sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated Total Income of Rs 36661.08 Crore, up 16.04 % from last quarter Total Income of Rs 31593.77 Crore and down -.14 % from last year same quarter Total Income of Rs 36711.69 Crore. Company reported net profit after tax of Rs 2849.08 Crore in latest quarter.


Investment Rationale
With robust orders and a sturdy pipeline, revenue assurance is healthy. The brokerage expects 17%/28% revenue/PAT CAGRs over FY21-23. Valued on a sum-of-parts basis and at a 20x multiple for its core business, the brokerage arrives at a higher TP of Rs1,763. It retains a Buy. Risks: Sluggish capex, volatile crude prices.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of Dec 31, 2020, while FIIs held 18.8 per cent, DIIs 17.2 and public and others 64 per cent.