Larsen & Toubro (L&T) shares rallied as much as 11 per cent in the early trade on Wednesday after the engineering major reported 18.55 per cent jump in consolidated net profit at Rs 2,453.64 crore for the quarter ending March 31, 2016
Larsen & Toubro (L&T) shares rallied as much as 11 per cent in the early trade on Wednesday after the engineering major reported 18.55 per cent jump in consolidated net profit at Rs 2,453.64 crore for the quarter ending March 31, 2016, on the back of higher income driven by infrastructure segment. On the outlook, the company said the domestic market continues to hold promise for revival of growth.
At 9.35 am, L&T shares were trading nearly 10 per cent up at Rs 1419. The scrip opened at Rs 1404 and has touched a high and low of Rs 1436.45 and Rs 1389.75, respectively, in trade so far. The scrip later settled the 14.04 per cent up at Rs 1472.60.
The company had reported a net profit of Rs 2,069.64 crore in the corresponding quarter of 2014-15.
Consolidated net sales of the company jumped 18.51 per cent year-on-year to Rs 32,812.24 crore in the quarter under review as against Rs 27687.12 crore in the same quarter last year.
According to Sharekhan, Larsen & Toubro (L&T) reported a very healthy performance for the quarter ended March 2016, much ahead of our as well as Street estimate. The management sounded optimistic that some of the projects have started moving and shared that things are better than last year. Though the hydrocarbon related prospects from the Middle East market could remain subdued they are fairly confident of the social infrastructure prospects to be healthy. The management’s guidance for FY2017 is quite encouraging.
L&T is expecting 12-15 per cent increase in revenues and a 15 per cent growth in its order inflows for 2016-17. Sharekhan has revised upward earnings estimate by 8-10 per cent and maintained ‘Buy’ on L&T with a revised price target of Rs 1,550 (earlier Rs 1,405).
For the whole year, Larsen & Toubro’s consolidated net profit increased by 6.83 per cent to Rs 5,090.53 crore as against Rs 4,764.82 crore in 2014-15.
Edelweiss Securities believes L&T is geared to record high growth rates and capable of surprising the Street positively due to improving ground conditions and operational efficiencies. The brokerage house maintains ‘buy’ rating on L&T, with a target price of Rs 1,750.
(With agency inputs)