Larsen & Toubro - Growth @ Higher NWC, Reiterate Accumulate - Emkay

- APAT growth at 28% yoy ahead estimates - driven by (1) 21% yoy revenue growth and (2) decline in interest costs and lower tax incidence. EBITDA margins decline 130 bps yoy.

- Order inflows down 31% yoy (miss target). Order book flat qoq at Rs1457 bn. L&T expects order inflow growth at 15-20% in FY13E on back of clear visibility for 35-40% of target.

- APAT growth in FY12 driven by better execution… but with rise in net working capital cycle. Higher base triggers 10% upgrade in standalone FY13E EPS, but cut in Consol EPS.

- Reiterate L&T as top pick (strong order book cover, a proxy investment play and superior earning growth amongst peers) Maintain earnings estimates. Maintain ACCUMULATE.

Source : Equity Bulls

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