L&T (Larsen & Toubro) — CMP ₹4,030.50
Larsen & Toubro
🟢 Overall view: BUY ON DIPS
At ₹4,030.50, L&T is fundamentally strong, but technically it is in a consolidation/recovery zone rather than a clean breakout. The latest Q1 FY27 numbers showed consolidated revenue of about ₹67,942 crore and EPS of ₹29.96; order inflow was particularly strong at about ₹1.08 lakh crore, up 14% YoY, taking the order book to roughly ₹7.79 lakh crore.
📊 Trading setup
Parameter View
CMP ₹4,030.50
Trend 🟢 Bullish above ₹3,950
Action BUY
Entry zone ₹3,990–₹4,040
Breakout level ₹4,100
Target 1 ₹4,180
Target 2 ₹4,300
Target 3 ₹4,425
Stop Loss ₹3,900
Probability 68%
Expected upside to ₹4,425 ~9.8%
Timeframe 1–15 days
Recent technical data showed L&T below its 50/200-day averages during the July correction, but the stock subsequently recovered toward ₹4,045. The broader chart therefore needs ₹4,100+ confirmation before I would call it a strong momentum breakout.
🎯 Price-action levels
₹4,000–₹3,950 = important support zone
If ₹3,950 holds, the structure remains constructive.
₹4,100 = breakout trigger
A sustained close above ₹4,100 with good volume can produce:
₹4,180 → ₹4,300 → ₹4,425
Below ₹3,900, the short-term BUY setup becomes invalid and ₹3,820–₹3,850 can become possible.
📈 EPS & Future Growth
L&T's FY26 standalone PAT excluding exceptional items rose 26.3% to ₹13,129.81 crore.
More importantly, Q1 FY27 order inflow was strong and management maintained FY27 revenue/order-growth guidance of approximately 10–12%. The record order book provides good earnings visibility, although Middle East execution and margins remain risks.
One institutional forecast from PL Capital had:
Year EPS estimate
FY26 ~₹147
FY27E ₹135.4
FY28E ₹174.2
The FY27 EPS reduction reflects near-term execution/supply-chain pressure, while FY28 assumes recovery.
My growth interpretation: FY27 may be relatively moderate, but FY28 has substantially better earnings-growth potential if project execution normalizes.
L&T also says its long-term Lakshya 2031 strategy targets roughly 10–12% order-inflow CAGR and 12–15% revenue CAGR over FY26–31.
💰 P/E & Fair Value
At ₹4,030.50, L&T is not cheap on current earnings. Depending on the earnings basis used, the stock is around the high-20s/low-30s P/E range. Market data recently showed about 28.8× P/E, while Motilal Oswal estimated core E&C at about 31× FY27E and 23× FY28E earnings.
For a more conservative valuation, I would use approximately 22–25× FY28E EPS for the core business, plus value for subsidiaries.
Using FY28E EPS of ₹174:
22× = ₹3,828
24× = ₹4,176
25× = ₹4,355
Because L&T has valuable subsidiaries and businesses beyond core E&C, an appropriate SOTP valuation can be higher. Recent broker targets include ₹4,425 from Prabhudas Lilladher and ₹4,550 from Motilal Oswal.
🎯 My fair-value range
₹4,200–₹4,500
Bull-case value: ₹4,600–₹4,750 if FY28 execution and margins improve strongly.
💵 Dividend
L&T's FY26 Board report recommends a ₹38/share final dividend, subject to shareholder approval.
At ₹4,030.50, ₹38 represents approximately 0.94% dividend yield.
So L&T should primarily be considered a capital-appreciation + earnings-growth stock, rather than a high-dividend stock.
🟢 FINAL L&T CALL
CMP: ₹4,030.50
BUY: ₹3,990–₹4,040
Breakout BUY: Above ₹4,100
Target 1: ₹4,180
Target 2: ₹4,300
Target 3: ₹4,425
Stop Loss: ₹3,900
Probability: 68%
Potential upside to ₹4,425: ~9.8%
Fair Value: ₹4,200–₹4,500
FY28E EPS: ~₹174 in the cited PL Capital estimate
Dividend: ₹38 proposed for FY26
View: 🟢 BUY ON DIPS / BUY ABOVE BREAKOUT
Most important level: ₹4,100. Above it, momentum can accelerate toward ₹4,300–₹4,425. Below ₹3,900, I would exit the short-term trade rather than average blindly. *SHREEJIFINANCE& INVESTMENT*
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