L&T Q4 review: Global brokerages see up to 40% upside

Global brokerages – Jefferies, Morgan Stanley, CLSA, and Macquarie have maintained their rating on Larsen & Toubro (L&T) post it Q4 result. The engineering and construction firm reported a 4.6 percent year-on-year (YoY) rise in its March quarter consolidated profit at Rs 3,167 crore, beating estimates.

Revenue grew 11 percent YoY to Rs 40,678 crore. Other income was up 5 percent YoY on gains from treasury operations. Net profit came in at Rs 3,025 crore as against a Reuters poll of analysts which estimated a drop to Rs 2,994.4 crore.

The most aggressive target price on L&T post its result was issued by Jefferies. The global investment bank expects the stock to hit Rs 1,925 per share in the next 12 months, which translates in an upside of nearly 40 percent from Mondays closing price of Rs 1,377.60 per share.

Most global brokerages are of the view that the managements FY19 guidance signals an increase in business confidence. For FY19, it has guided for a 12-15 percent and 10-12 percent YoY growth in revenue and order inflows, respectively. It expects a stable EBITDA margin with an upward bias of up to 25 basis points (bps).

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