Long Term Buy Call For Larsen and Toubro

Larsen and ToubroMotilal Oswal is bullish on Larsen and Toubro and has maintained 'buy' rating on the stock in its latest research report.

According to the research report, the investors can buy the stock to achieve a long term target of Rs 1905.

The stock of the company, on March 07, closed at Rs 1567.55 on the Bombay Stock Exchange (BSE).

The share price has seen a 52-week high of Rs 2212 and a low of Rs 1484.70 on BSE.

Current EPS & P/E ratio stood at 57.63 and 27.09 respectively.

L&T has two joint ventures with Mitsubishi Heavy Industries (MHI) to build boilers and turbines and possesses 51% equity stake in each.

The plants established with a total investment of Rs 36 billion have resourceful manufacturing procedures, and will attain a high level of localization by the next three fiscals.

L&T's BTG plant is the country's biggest single location incorporated construction facility.

The company's Heavy Engineering Systems arm produces static products for core sections.

The biz has design and quality specs of different agencies and several firsts to its credit. The Modular Fabrication Facility (MFF) located at Hazira is one of its three manufacturing yards, with region of 475,000sq meters.

The fabrication plants are the heart of L&T's victory in sections including hydrocarbons, shipbuilding and power.

The company's order reserve stod at Rs1,148b (up 26% YoY).

As per Motilal Oswal report, "We expect L&T to post consolidated earnings CAGR of 20% over FY11-13. However, slower growth in order-intake in FY12 can impact FY13 revenue growth (current estimate 21%). Our target price is Rs 1905 on an SOTP basis, with target multiple for L&T standalone at 22x FY12E EPS. Maintain Buy."