Indiabulls Securities Ltd is bullish on Larsen & Toubro (L&T). It has maintained an ‘outperform’ rating on the company with a target price of Rs 2720.

According to Indiabulls, interested investors can purchase the stock between Rs 2450-2510 with a strict stop loss of Rs 2380.

Today (July 10), the company’s shares opened at Rs 2,490, as against its last closure at Rs 2,512.95 on Wednesday  (July 9), on the Bombay Stock Exchange (BSE). Current EPS and P/E ratio stood at 74.25 and 33.83 respectively. The share price has seen a 52-week high of Rs 4670 and a low of Rs 2100 on BSE.

If investors have already invested in L&T then it is wise to remain invested in the stock. The stock has great potential. It can still exhibit superb surge. It will achieve the target price as the company has aggressive growth plans and strong operating capabilities.

Order inflows for L&T should remain strong in the coming quarters on the back of an increasing infrastructure and the move in Company’s plan in the direction of high growth sectors including oil and gas, power, and shipbuilding.

Larsen & Toubro (L&T) has pocketed a Rs 10.48 billion order from the Indian Railways for setting up a cast steel wheel manufacturing plant in Saran (Chhapra) District of Bihar.  

It has also secured an order worth Rs 4.46 billion from JSW Power Transco for evacuation of power from the 1200 MW power project set up by JSW Energy at Ratnagiri in Maharashtra.
 
The company also received Rs 15.57 billion order for the steam turbine generator package of 2 x 800 mw for Damodaran  Sanjeevaiah Thermal Power Station at Krishnapatnam, Andhra Pradesh.

L&T is also making discussions acquire the project business of Crompton Greaves. It is learnt that L&T has started due diligence on Crompton`s project business, which is valued to be around Rs 4 billion.

Moreover, L&T has sold its Ready Mix Concrete business to Lafarge for Rs 14.8 bn.

L&T Electricals Saudi Arabia Company Limited (LTESA), the joint venture between Larsen & Toubro International FZE (LTFZE) and Yusuf Bin Ahmed Kanoo, inaugurated its switchboards manufacturing facility in the Kingdom of Saudi Arabia.

For ship-building, the company has earmarked about Rs 3,000 crore for the next few years.

The company registered a turnover of Rs 29,600 crore during the last fiscal (2007-08), and this year it anticipates a growth of 30% in sales.

It is expected that L&T’s consolidated revenue and net profit to grow at a CAGR of 31.1% and 32%, respectively, over 2008-2010. However, the consolidated EBITDA margin to fall by 27 bps from the present levels in FY09E.