Buy Larsen & Toubro, target price Rs 2000: Emkay Global

Emkay Global has buy call on Larsen & Toubro with a target price of Rs 2000. The current market price of Larsen & Toubro Ltd. is Rs 1687.7. Time period given by analyst is one year when Larsen & Toubro Ltd. price can reach defined target.

Larsen & Toubro Ltd., incorporated in the year 1946, is a Large Cap company (having a market cap of Rs 236844.48 Crore) operating in Construction sector.

Larsen & Toubro Ltd. key Products/Revenue Segments include Income From Construction Work, Income from Manufacturing and Trading Activities, Other Services, Other Operating Revenue, Property Development, Commission, Lease Rentals and Engineering for the year ending 31-Mar-2020.


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
The brokerage maintains Buy rating and raise SOTP-based TP (Sept'22E) to Rs 2,000 from Rs 1,870, as it factors in the higher valuation for subsidiaries (IT, Finance) and roll forward valuation from June'22E. LT (ex-IT/Finance/Development) trades at ~16x Sept'23E EPS, below its 5-year average of ~21-22x.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2021, while FIIs held 24 per cent, DIIs 32.5 per cent and public and others 43.5 per cent.