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Community User Posted on 02:41pm 29-Oct-2020

What is the prospects of L&T stock.

  • ICICIdirect Research @SANDHYA NAGESH KINI - Fundamental view on Larsen & Toubro: Our research analysts have a HOLD rating on the stock with a target price of Rs. 1045 from a 12 to 15 months perspective.

    For Q2FY21, the cash flow from operations (CFO) came in robust at | 2770 crore for Q2FY21 (Vs. | 1410 crore in Q2FY20). The company also declared special dividend of | 18 per share. Working capital to sale ratio stood at 26.7% for H1FY21 (Vs. 26.8% in Q1FY21) on account of lower revenue booking and company’s intent to support vendors amid challenging business environment.

    L&T received net of tax cash proceeds of ~11000 crore from transfer of its Electrical & Automation (E&A) business which is likely to be utilised towards
    a) | 2500 crore for dividends,
    b) ~| 5000 crore towards retirement of debt taken as liquidity buffer during pandemic,
    c) | 2000 crore towards investment in services business (incl. financial services),
    d) | 2000 crore allocated towards Hyderabad metro restructuring.

    L&T reported reasonable order inflows while execution is seeing green shoots of a revival despite productivity challenges that could improve over next few months. Also, preservation of working capital and cash proceeds from E&A has provided much needed comfort on the balance sheet front.

    For more details, you can refer to the below link:
    https://www.icicidirect.com/mailimages/IDirect_LarsenToubro_Q2FY21.pdf

    04:21pm 30-Oct-2020