L&T record highs with a 5% increase in just 5 days; Jefferies, UBS maintain ‘buy rating

The stock has risen to records during the week and has gained by as much as 5 percent

The shares of the major in civil construction Larsen & Toubro (L&T) have been making significant progress this week. The stock has hit records during the week and has risen by as much as 5 percent. On September 29th, the scrip issued by L&T was at an all-time maximum of Rs. $3,057 on BSE, which was up 1.5 percent.

As of Friday, more than 11 lakh shares traded hands at both exchanges compared with 42,000 shares as of September 28th. The average of one week was about 23 lakh shares traded volume on the counter.

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In an exchange document on September 29th, L&T informed that its construction arm had won a massive deal with the Mumbai Metropolitan Region Development Authority (MMRDA) for the design and the construction of the Underground Road tunnel Project between Orange Gate, Eastern Free Way to Marine Drive Coastal Road at Mumbai.

“The aligning project will be predominantly under the Sardar Valabhbhai Patel Road, and will be completed in 55 months,” Management said in a press announcement.

In addition, on September 28th, L&T settled bids for the share buyback of Rs 10,000 crore, which achieved an acceptance of 100 percent by the retail ratio. The price was set at 3,200 a piece.

Brokerages view

With back-to-back orders on the pipeline, international brokerage firm Jefferies kept a “buy” rating on L&T in a statement that said the key regions of the company, including India as well as the Middle East, are seeing capex gains.

“We continue to monitor the first half of the fiscal year (H1FY24E) to witness the growth of order flow since elections will drive FY24E’s front-end order flow. H2 will profit from the margin recuperation. L&T trades in the range of FY25E PE 26x i.e. the lowest price (23 percent) in comparison to that of the FY03-10 (previous capex upcycle) average PE in comparison to the other coverage universe,” the brokerage firm said.

The folks at UBS also kept a positive outlook on the exchange, boosting its price target to Rs $3600 per share. Analysts are expecting L&T to post a compounded annual increase (CAGR) between 17 and 32 percent for the core sales and EPS for the period 2023-26 in a fiscal year.

“The new strategy of the company ensures its desire for constant increase in new orders. The new approach also provides growing opportunities in the international market. A quarter of L&T’s order book during the June quarter was from the Middle Eastern region,” The brokerage noted in their most recent report.

In addition, Analysts at Prabhudas Lilladher have revealed their target price of 3,302 per share. CLSA disclosed an estimate of 3,240 per share. Bernstein has a target price of Rs. 3 268 per share in L&T. Qatar Airways executive assures no more intrusive gynecological exams on passengers.


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