L&T share price surges 4% post healthy Q1 earnings; brokerage recommends Buy - Check price target

L&T share price: Index heavyweight Larsen & Toubro (L&T) shares surged nearly 4 per cent to Rs 1,819 per share on the BSE intraday during Wednesday’s trading session on account of healthy numbers in the June-end quarter of FY23.

The engineering and construction major had on Tuesday reported nearly 45 per cent jump in its consolidated profit to Rs 1,702 crore for the first quarter of the current fiscal as compared to Rs 1,174 crore in the year-ago period.  

Similarly, the company’s consolidated revenue from operations advanced 22.22 per cent to Rs 35,853 crore in Q1FY23, aided by improved construction activity and strong execution across projects. 

In Q1FY23, L&T secured orders worth Rs 41,805 crore at the group level, registering a growth of 57 per cent over the corresponding quarter of the previous year. Meanwhile, international orders at Rs 17,842 crore during the quarter comprised 43 per cent of the total order inflow. 

At around 01:10 PM, the stock of L&T was trading almost 3 per cent higher to Rs 1798.6 per share on the BSE as compared to a 0.76 per cent rise in the S&P BSE Sensex. In the last one year, the counter has gained almost 12 per cent, while in the last six months, it slipped almost 6 per cent on the BSE. 

L&T reported an in-line revenue print with some softness in the hard-to-predict core E&C EBITDA margin. Sectoral data points on ordering and raw material price trends may boost the case for L&T beating its guidance, though needs to sustain, Kotak Institutional Equities said in its review report. 

The current weakness in margin reflects less potential margin at current spot rates of key commodities, the brokerage said, retaining the Buy target with a target price of Rs 2,000 per share, implying over 14 per cent upside.