Larsen & Toubro - Q4 Result Update - ICICI Securities

L&T's adjusted standalone revenues (ex-E&A business) for the quarter de-grew 7.5% YoY to Rs. 27252.8 crore, below our estimate of Rs. 29882 crore. On a standalone basis, infrastructure segment posted a subdued performance with revenue decline of 5.9% to Rs. 24306.4 crore on a YoY basis. Heavy engineering segment revenue de-grew 22% to Rs. 701.6 crore on a YoY basis. While power segment revenues continued to decline 39.5% to Rs. 565.3 crore, defence engineering segment revenue de-grew 16.3% to Rs. 928 crore. On a consolidated basis, revenues from continuing operations (excluding E&A business) grew 2.2% to Rs. 44245.3 crore YoY. Consolidated PAT for Q4FY20 was at Rs. 3562.5 crore, down 6% YoY. Note: Electrical & automation business is classified as 'discontinued operations', consolidating only at PAT level.

Valuation & Outlook

L&T reported decent order inflows, which provides strong revenue visibility for two to three years. However, execution challenges amid Covid-19 could have some impact in the near term. Also, preservation of working capital levels would be closely monitored to maintain comfort on balance sheet front. L&T is expected to deliver standalone revenue CAGR of 1.2% and EBITDA CAGR of 9.4% in FY20-22E. We value L&T on SoTP (with base business at 16.5x FY22E EPS) with a revised target price of Rs. 1090 and change our rating from BUY to HOLD.

For details, click on the link below https://www.icicidirect.com/mailimages/IDirect_LarsenToubro_Q4FY20.pdf

Shares of LARSEN & TOUBRO LTD. was last trading in BSE at Rs.955.3 as compared to the previous close of Rs. 931. The total number of shares traded during the day was 247885 in over 10882 trades.

The stock hit an intraday high of Rs. 964.9 and intraday low of 937.5. The net turnover during the day was Rs. 235857492.

Source : Equity Bulls

Keywords