L&T shares jump after Q2 beat, brokerages turn bullish
Larsen & Toubro shares rose as much as 4 per cent on Monday after India's biggest construction and engineering group reported a 7 per cent annual rise in profit for the three months to September 30. L&T also maintained its revenue growth forecast of 15 per cent for the current fiscal year to March after
As of 09.18 a.m., L&T shares traded 3.7 per cent higher at Rs 904 after earlier hitting a high of Rs 905. The stock was the top gainer on the 50-share Nifty benchmark.
Deven Choksey, managing director of KR Choksey told NDTV that L&T Q2 promises for better order inflow in the second quarter. Investors should use any correction to buy L&T shares, he added.
L&T, widely seen as a bellwether for India's economy, said recurring net profit rose to Rs 978 crore in the fiscal second quarter compared with the Rs 900 crore average estimate of nine analysts. Gross revenue rose 10 per cent to Rs 14,648 crore.
New orders between July and September grew at an annual rate of 27 per cent to Rs 26,500 crore as international order inflows more than doubled, accounting for 43 per cent of total new business, L&T said in a statement.
Overseas contracts won in the quarter include a $1.4 billion project to build bridges, tunnels and stations for a metro line in Saudi Arabia.
Here's what analysts said post earnings announced on Friday.
* Angel Broking said the results were above its expectations and it remained positive on the company. "We believe L&T is best placed to benefit from the gradual recovery in the capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to its peers," Angel analyst Viral Shah told Reuters in emailed comments.
* Macquarie said Q2 should reduce Street's skepticism. Margin performance is commendable despite one-off charges, the brokerage added.
* Barclays said L&T is back on the growth path and the recovery appears to be panning out earlier than expected.
* CLSA retained its outperform rating given reasonable valuations.
(With inputs from Reuters)