L&T - Q1FY14 Result Preview - Angel Broking

For 1QFY2014, owing to a large order book (~Rs. 1.54trillion) and robust order inflows in the past couple of quarters, we expect Larsen & Toubro (L&T) to record a revenue of Rs. 13,100cr, indicating a growth of 9.6% yoy. On the EBITDA front, we expect the company's margin to witness an expansion of 141bp yoy to 10.5%. We project the net profit to come in at Rs. 911cr for 1QFY2014, registering a growth of 1.6% yoy. We estimate the company's order inflow to be at ~Rs. 30,000cr for the quarter, which is in-line with the Management's guidance of 20% growth in order book for the full year.

At the CMP, the stock is trading at 16.6x FY2015E earnings and 2.5x 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. 1,180. We continue to recommend Buy rating on the stock.

Source : Equity Bulls

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