Mon Oct 14 05:03:24 UTC 2024: ## L&T Sees Growth Potential: JPMorgan Initiates Coverage with ‘Overweight’ Rating
Larsen & Toubro (L&T), a leading infrastructure firm, has attracted a positive outlook from JPMorgan, which has initiated coverage on the company with an “Overweight” rating and a target price of Rs 4,360. The brokerage believes L&T is well-positioned to benefit from the ongoing capital expenditure cycle in India and the Middle East, making it an attractive investment at current valuations.
JPMorgan highlights L&T’s strong earnings growth prospects, driven by the expected bottoming out of its Plant and Machinery (P&M) margins. The firm forecasts a 16 percent growth in L&T’s core revenue and a 60 basis points expansion in core margins over FY24-FY27, further boosting its earnings per share (EPS) growth.
L&T’s recent win of a Rs 1,000 crore order from Rashtriya Chemicals and Fertilizers Ltd (RCF) for a new fertilizer plant reinforces its strong order book. L&T’s R Shankar Raman has projected the company’s current $60 billion order book to rise four-fold in the next 25 years.
During a recent panel discussion, Raman emphasized L&T’s focus on reducing the time taken to complete infrastructure projects. This, he believes, can significantly enhance project sponsorship and reduce costs.
L&T’s shares ended nearly a percent higher at Rs 3,491.90 on the National Stock Exchange (NSE) in the previous session. While the stock has underperformed Nifty’s returns this year, it has risen around 12 percent in the last year.
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