Emkay Global Financial Report on Larsen and Toubro

LT reported PAT RS17BN for Q1FY23, slightly below the estimated road behind the lower EBITDA margin in the infrastructure segment (6.5% vs 7.1% in Q1FY22), mostly due to higher commodity prices. Revenue rose 22% to RS359BN, driven by 36%/30% infrastructure growth/IT segments. Order Inflow (Ex -Services) Standing in RS280BN – up 85% yoy, although it is still slightly below the Q1fy20 level. Order prospects are currently standing at RS7.6TN and LT hopes to achieve a 12-15% growth guidance because it has been selective in the supply. Order book at the end of the quarter established in RS3.6TN, with a high infrastructure/energy/high -tech manufacturing segment contributed 73%/18%/5%.

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We maintain purchases with TP Mar’24e from RS1.960. LT’s core business is currently traded in ~ 18x fy24e eps. In an effort to increase profitability, LT wants to leave