Large Cap Construction Stock To Buy, UBS Upgrades TP To Rs 4400; Gains 43% In 6-Months

Brokerage firm UBS has assigned buy call to large cap construction sector company Larsen & Toubro Ltd shares and upgraded the target price from Rs 3,600 to Rs 4,400 apiece. Last trading price of Larsen & Toubro share on BSE is Rs 3508.60 per share with intraday fall of 0.18%. Larsen & Toubro shares offered gain of 13% in last 3-months and soared 68% in last 1-year. L&T stock witnessed a dip of 0.39% in last 1-week. If you buy L&T shares at last trading price of Rs 3508.60, you can fetch likely gain of 25.41%. Check details below:

Valuation: The analyst feels that L&T's strong order cycle and powerful execution should boost the margin prospects going ahead. "At 1x PEG, we believe that the L&T stock is attractive and raised core price-to-earnings (PE) multiple to 30x from 26x. We believe that core earnings, returns will improve going ahead and new orders will continue to remain robust. Apart from that, core cash flow and return on capital employed (ROCE) are critical for consistent growth," added the brokerage firm.

Larsen & Toubro Stock Performance & Return: The stock's 52-week high price is Rs 3,560.00 per share and 52-week low price is Rs 2072.30 per share, respectively. Larsen & Toubro has a market capitalisation of Rs 4,82, 274.02 crore. Larsen & Toubro shares surged 43% in last 6-months, gained 84% in last 2-years, and offered surge of 155% in last 3-years. L&T share offered shareholders return of 153% in last 5-years.

Orders Win in Middle East Region: The Power Transmission & Distribution business of L&T Construction has secured key orders in the Middle East region. In the United Arab Emirates, the business has received an order for Engineering, Supply, Construction, Installation, Testing and Commissioning a 400/132kV Substation. The scope also includes associated Transformer, Reactor and Substation Control & Monitoring Systems (SCMS). In Kuwait, the business has won an order to establish 400kV Overhead Transmission Lines along with associated 400kV Underground Cable interconnections. This transmission segment of more than 100KM route length will help to evacuate and generate power.

Earlier last year on December 12, the construction arm of Larsen & Toubro said that it has been chosen as the turnkey Engineering, Procurement and Construction contractor to establish various systems related to renewable energy generation and utilities, for the AMAALA project in the Red Sea region, Saudi Arabia.

AMAALA is an ultra-luxury destination set in the Prince Mohammed bin Salman Natural Reserve along Saudi Arabia's northwestern coast. Spanning an area of 4155 square kilometers, the project features pristine landscape and diverse natural ecosystems, coupled with unique and intriguing heritage and local culture.

About: Larsen & Toubro is a USD 23 billion Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. It operates in over 50 countries worldwide. A strong, customer-focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for eight decades.