On Thursday, UBS maintained a Buy rating on Larsen & Toubro Ltd. (LT:IN) (OTC: LTOUF) stock and increased the price target to INR4,330.00 from INR4,180.00. The adjustment reflects a positive outlook based on the company's first-quarter performance and expectations of continued growth.
The firm's analysis highlighted Larsen & Toubro's recovery in core margins, particularly within its infrastructure division. This improvement, coupled with strong execution and order intake, is anticipated to be well-received by investors.
The company's robust order inflow over the past years has set a high bar, and while future growth for FY25 is expected to be modest, it aligns with the current dynamics in the Middle East and domestic market capital expenditures.
UBS's forecast for Larsen & Toubro includes an 18% compound annual growth rate (CAGR) in core top-line and a 23% CAGR in EBITDA for the period FY24-27e. The revised sum-of-the-parts (SoTP) based price target of INR4,330 takes into account these projections and the company's recent performance.
The firm's commentary suggests confidence in Larsen & Toubro's ability to sustain its growth trajectory and operational efficiency. The updated price target is indicative of the firm's belief in the company's potential for continued financial success and market performance.
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