Wealth creation pick: Anil Singhvi recommends buying THIS stock

Anil Singhvi stock pick: Zee Business Managing Editor Anil Singhvi suggests going long on construction major Larsen & Toubro (LT), a stock he believes has upside potential of as high as 50-60 per cent. In this special segment, Wealth Creation Pick, Singhvi explains the rationale behind his latest stock pick as well as the target price.  

Why Anil Singhvi likes LT shares now

Singhvi said that 60 per cent of the company’s revenue comes from its capital goods and infrastructure business, which is outperforming. 

The company's order book will grow in the next few years as the government is focusing on developing the country’s infrastructure, which will be a key positive for L&T, according to Singhvi. 

The rest, 40 per cent, comes from its finance and IT arms, among which L&T Tech Services is growing rapidly. 

Singhvi also said that 30-40 per cent of the revenue comes from L&T Tech Services,  which is giving a strong cash flow. 

Anil Singhvi's view on the Indian IT sector

The market expert believes the IT sector will bottom out in the next 3-6 months, which could well be a buying opportunity for investors.

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Anil Singhvi target price

Singhvi sees target to the tune of Rs 2500, Rs 2,800 and Rs 3,300 for L&T shares with a perspective of three years.

What brokerage says

Brokerage firm, Sharekhan has also recommended buying shares of L&T for a target price of Rs 2,600 apiece. (19.8 per cent upside) 

According to Sharekhan, L&T, the engineering conglomerate, by virtue of its leadership and commendable execution track record in the engineering, procurement, and construction (EPC) domain will benefit from capital expenditure upcycle in both public and private sectors. 

Further, the report said, for FY2023, the company would most likely exceed its order intake guidance and would easily achieve the upper end of its revenue growth guidance, given its robust order book.

The report added that apart from strong growth visibility in its existing business, new avenues such as green hydrogen, data centers, and e-commerce businesses would contribute to its long-term growth.

HDFC Securities is also bullish on L&T and has given a ‘buy’ call for a target price of Rs 3,600. (66.9 per cent upside)

According to the brokerage, key positives include:

-traction in the transportation vertical, also supplemented by empanelment from Airbus as a strategic partner, which will augment growth in the vertical 

-recovery in the plant engineering vertical in Q4, aided by a strong pipeline.

L&T share price history 

Year to Date (YTD) L&T stock has gained 3.90 per cent as compared to a nearly 7 per cent fall in Nifty 50

In the past six months, the stock has surged 14.53 per cent as compared to over 4 per cent drop in Nifty 50.

L&T stock settled at Rs 2,178.95 apiece on Monday, March 20 trading session.

The 52-week range of the stock is between Rs 2,297.65 apiece to Rs 1,456.35 apiece. ​

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