L&T (Larsen and Toubro) posted a good set of numbers for 4Q FY 2012, which were broadly in-line with our expectations; however, the company disappointed on the order inflow front.
As of 4Q FY 2012, L&T’s order backlog stands at Rs. 1,45,723cr, 11.0 % y o y growth. Order inflow for the quarter declined by 30.2% to Rs. 21,159 cr, taking the order inflow for FY 2012 to Rs. 70,574 cr (down 12% y o y). We prefer L&T over its peers, as it is a market leader and fundamentally the strongest infrastructure company.
We maintain L&T as our top pick in the sector and, hence, continue to recommend Buy on the stock. Performance in-line with estimates: On the top-line front, L&T reported decent top-line growth of 20.0 % yoy to Rs 18,461 cr, marginally below our estimate of Rs. 18,945 cr.
On the EBITDA front, performance was as per our expectations, with the company reporting a y o y dip of 1.3% to 13.9% against our expectation of 13.7 %. On the bottom-line front, L & T reported 13.9 % y o y growth to Rs. 1,920 cr marginally higher than our estimate of Rs. 1,862 cr, owing to exceptional gain (Rs. 55 cr) and lower tax rate ( 26.9 %).
Outlook and valuation: For FY 2013, management has given a guidance of 15 to 20 % growth for both revenue and order inflow. We believe although the company can achieve this guidance on the revenue front, given its robust order backlog, it would be difficult to achieve 15 to 20% growth on the order inflow front,
considering the challenging macro environment and hence are factoring order inflow growth of 10.6 % for FY 2013.
We believe L & T is best placed to benefit from the gradual recovery in capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to peers.
We maintain L & T as our top pick in the sector and maintain our Buy rating on the stock with a target price of Rs1,553.
By Nitin Arora, 022-39357800 Ext: 6842 nitin.arora@angelbroking.com
As of 4Q FY 2012, L&T’s order backlog stands at Rs. 1,45,723cr, 11.0 % y o y growth. Order inflow for the quarter declined by 30.2% to Rs. 21,159 cr, taking the order inflow for FY 2012 to Rs. 70,574 cr (down 12% y o y). We prefer L&T over its peers, as it is a market leader and fundamentally the strongest infrastructure company.
We maintain L&T as our top pick in the sector and, hence, continue to recommend Buy on the stock. Performance in-line with estimates: On the top-line front, L&T reported decent top-line growth of 20.0 % yoy to Rs 18,461 cr, marginally below our estimate of Rs. 18,945 cr.
On the EBITDA front, performance was as per our expectations, with the company reporting a y o y dip of 1.3% to 13.9% against our expectation of 13.7 %. On the bottom-line front, L & T reported 13.9 % y o y growth to Rs. 1,920 cr marginally higher than our estimate of Rs. 1,862 cr, owing to exceptional gain (Rs. 55 cr) and lower tax rate ( 26.9 %).
Outlook and valuation: For FY 2013, management has given a guidance of 15 to 20 % growth for both revenue and order inflow. We believe although the company can achieve this guidance on the revenue front, given its robust order backlog, it would be difficult to achieve 15 to 20% growth on the order inflow front,
considering the challenging macro environment and hence are factoring order inflow growth of 10.6 % for FY 2013.
We believe L & T is best placed to benefit from the gradual recovery in capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to peers.
We maintain L & T as our top pick in the sector and maintain our Buy rating on the stock with a target price of Rs1,553.
By Nitin Arora, 022-39357800 Ext: 6842 nitin.arora@angelbroking.com
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