Buy This L&T Stock As Recommended By Sharekhan, Sees Robust Upside, Trading Near 52 Week High

Sharekhan has come up with a "Buy" rating for Larsen & Toubro Ltd. (L&T) for a target price of Rs 2,600 apiece. The stock is likely to give a healthy return if the stock is purchased at the current market price, considering the given target price.

This is large cap stock of multinational conglomerate L&T Group. It provides engineering, procurement and construction (EPC) solutions in key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology and Financial Services in domestic and international markets. It has a market capitalisation of Rs 3,08,224 crore.

Larsen & Toubro's Stock Outlook & Returns

Larsen & Toubro stock on NSE last traded at Rs 2,193.20 apiece, up 1.03% as compared to its previous close. The stock is trading 4.76% down its 52 week high, which is Rs 2,297.65 apiece, recorded on 20 January 2023. The stock's 52 week low is Rs 1,456.35 apiece, recorded on 20 June 2022.

The stock has given 3.37% in the past 1 week and 2.13% in the past 1 month, respectively. It has given 29.7% positive return in the past 1 year. In the past 3 years, it has given 99.03% positive return. In the past 5 years, it gave 69.95% positive return.

Sharekhan Maintain Buy with a revised PT of Rs. 2,600/share

According to Sharekhan, L&T's 9MFY2023 performance has been commendable despite cost pressures in its core business and supply-chain challenges. Further, a robust order book and strong order pipeline going forward give us comfort on execution from a long-term perspective. The company also expects margins to improve from Q4FY2023. The international outlook is also buoyant, given a healthy order pipeline and emerging opportunities in non-oil segments such as infrastructure, green energy, and hydrocarbon particularly in the GCC region.

Sharekhan said, "We believe L&T remains at the forefront to reap benefits from the AtmaNirbhar Bharat scheme with its leadership in the EPC domain and diversified offerings in infrastructure, heavy engineering, defence, and IT. Hence, the company remains the best proxy for the domestic capex upcycle. Therefore, we maintain our Buy recommendation on the stock with a revised SOTP-based price target (PT) of Rs. 2,600, increasing our target P/E multiple for the core business, given strong growth opportunities in the capex upcycle."

Key Risks

Commenting on the Key Risks to the "Buy" call, Sharekhan stated the key risks as Any slowdown in the domestic macroeconomic environment and geopolitical conflicts on the international front can adversely impact its order prospects.

Disclaimer

The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.