Axis Securities has maintained a 'buy' rating on Larsen & Toubro (L&T) with a long-term target price of Rs 1,736. The target price has an upside potential of 26 percent from the company's closing price of Rs 1,380.65 per share on Wednesday, the firm said.
The brokerage said that L&T has consistently posted strong performance amid challenging environment over the years and the firm has maintained a leadership position in domestic infrastructure space in all the major segments it operates in.
"With 16 percent market share in domestic infrastructure space, L&T has maintained its leadership position in all the major segments that it operates. The company is continuously moving away from noncore and lower margin businesses to increase revenue contribution of high margin services (IT and Finance) businesses," analysts of Axis Securities wrote in a report released on Wednesday.
Axis Securities expects L&T to surpass its revenue inflows for the remaining quarters of the current fiscal.
"Management has maintained its revenue growth and order inflow guidance at 12-15 percent and 10-12 percent for FY20. It has a strong and diversified order book which stands at Rs 3.03 lakh crore and deals pipeline remains strong at Rs 5.2 lakh crore for H2FY20," the report added.
L&T shares traded at Rs 1,399.75 per share on the BSE at 11.43 AM, up 1.38 percent. The stock opened at Rs 1,404 on Thursday and touched the day's high of Rs 1,417.50.
So far this year, L&T shares have corrected by nearly 2.5 percent. The one-year return on the stock remains flat, while in the last 10 years the stock has returned over 93 percent to its investors.