Larsen & Toubro - Q1FY21 Result Update - ICICI Securities

L&T's adjusted standalone revenues (ex-E&A business) for the quarter de-grew 50.6% YoY to Rs. 8150 crore, below our estimate of Rs. 8865.7 crore. On a standalone basis, infrastructure segment reported a subdued performance with revenue decline of 53.8% YoY to Rs. 6040.2 crore. Heavy engineering segment revenue de-grew 57.1% YoY to Rs. 425.1 crore. On the other hand, power segment revenues continued to decline 32.5% to Rs. 380 crore, defence engineering segment revenues de-grew 49.3% to Rs. 476.5 crore. Consequently, for Q1FY21, standalone adjusted PAT came in at Rs. 306.6 crore, which de-grew 65.6% YoY (below our estimate of Rs. 323.6 crore) aided by lower raw material cost and higher other income. On a consolidated basis, adjusted revenues from continuing operations on a like-to-like basis declined 31.4% to Rs. 21260 crore on a YoY basis.

Valuation & Outlook

L&T reported reasonable order inflows while execution challenges remains amid Covid-19, which could have some impact in the near term. Also, preservation of working capital to be closely monitored to provide comfort on the balance sheet front. We expect it to deliver standalone revenue CAGR of 1.2% and EBITDA CAGR of 4.3% over FY20-22E. We value L&T on SoTP (base business at 16x FY22E EPS) basis with a revised target price of Rs. 1045. We maintain our HOLD rating.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_LarsenToubro_Q1FY21.pdf

Shares of LARSEN & TOUBRO LTD. was last trading in BSE at Rs.916.35 as compared to the previous close of Rs. 920.95. The total number of shares traded during the day was 454308 in over 21935 trades.

The stock hit an intraday high of Rs. 937.8 and intraday low of 910.25. The net turnover during the day was Rs. 419489883.

Source : Equity Bulls

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