L&T - Q4FY13 Result Preview - Angel Broking

For 4QFY2013, we expect Larsen & Toubro (L&T) to record a revenue of Rs. 20,303cr, indicating a growth of 10.0% yoy. This growth can be attributed to the company's large order book (~Rs. 1.6trillion). On the EBITDA front, we expect the company's margin to witness a decline of 187bp yoy to 12.0%. We project net profit to decline by 18.3% yoy to Rs. 1,536cr in 4QFY2013. This is mainly due to lower-than-expected operating performance and higher base of last year. We estimate the company's order inflow to be at ~Rs. 23,275cr for the quarter, which is in-line with the Management's guidance of 15-20% growth in order book.

At the CMP, the stock is trading at 18.9x FY2015E earnings and 2.7x FY2015E P/BV, on a standalone basis. We have used the sum-of-the-parts (SOTP) methodology to value the company to capture all its business initiatives and investments/stakes in the different businesses. Ascribing separate values to its parent business on a P/E basis and investments in subsidiaries on P/E, P/BV and mcap basis, our target price works out to Rs. 1,795. We continue to recommend Accumulate rating on the stock.

Source : Equity Bulls

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