L&T hits new high on strong Q3 results

Larsen & Toubro (L&T) hit a new high of Rs 1,467, up 3.5% on BSE in early morning trade after the company reported a strong 53% jump in its consolidated net profit at Rs 14.9 billion for the quarter ending December 2017 (Q3FY18). The engineering & construction giant had profit of Rs 9.7 billion in the same quarter last fiscal.

Revenue from operations during the quarter under review rose 10% to Rs 287.5 billion against Rs 261.1 billion reported in the corresponding quarter last year.

The company saw a rebound in orders in Q3FY18 leading to a 38% growth in its order inflow seen at Rs 481.3 billion. With this, the company's total outstanding order book now stands at Rs 2.7 trillion. A larger chunk of these orders are from the domestic market, with L&T expecting to end the financial year with 75% of its order book coming from the domestic market alone.

“After a weak order intake in H1FY18, L&T saw strong uptick in orders, taking the total to Rs 481 billion (up 38%), driven by domestic orders (post addressing GST-related issues). For 9MFY18, order intake grew 8% to Rs 1,032 billion as orders from private sector remained elusive. The order backlog grew 5% to Rs 2.7 trillion and, with a strong order backlog, we expect execution to pick up in the next few quarters,” analysts at Antique Stock Broking said in result review.

Further, since L&T is firing on all cylinders, we see it as a credible play on investment recovery. We maintain BUY with revised SoTP based target price of Rs 1,580, it added.

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