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Should investors buy, sell or hold L&T after Q4 earnings? Here's what brokerages say

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The share price of engineering and infrastructure major Larsen & Toubro (L&T) fell over 3 percent on Monday after the company reported its March quarter earnings.

Should investors buy, sell or hold L&T after Q4 earnings? Here's what brokerages say
The share price of engineering and infrastructure major Larsen & Toubro (L&T) fell over 3 percent on Monday after the company reported its March quarter earnings.
The company’s Q4FY21 consolidated net profit at Rs 3,293 crore registered an increase of 3 percent compared to the year-ago quarter.
Order inflow, however, was at Rs 50,651 crore, lower by 12 percent over the corresponding period of the previous year with the deferment of awards.
Here's what brokerages have to say on the company's Q4 earnings and the stock:
CLSA
L&T's engineering and construction (E&C) execution was weaker than CLSA's estimate on regional lockdowns. L&T said the worker migration during the second wave of the lockdown was not as high as last year but ramp-up was delayed, said the brokerage, adding the company now looks for an execution pick-up from 2QFY22 with its solid $45 billion book.
Its FY22 guidance is realistic, at low-to-mid-teen growth in inflow and execution with a flat margin, according to CLSA.
CLSA lowered its target price (TP) to Rs 1,800 per share from Rs 1,850 earlier but reiterated its Buy rating "it is inexpensive at -0.4x std. and as it is on the cusp of a Capex cycle upturn".
Goldman Sachs
"Stars are aligning for the next leg of capex uptick in India," Goldman Sachs said. The brokerage maintained a Buy call with a target price of Rs 2,000 per share.
Nomura
Nomura has a Buy call on the stock with a target price of Rs 1,654 per share.
"The near-term EBITDA margin is susceptible to rising commodity prices," Nomura said.
It cut FY22 profit by 2 percent on near-term execution headwind in Q1FY22. "The strong order book and higher services will drive growth into FY23," it said.
JPMorgan
The brokerage cut the FY22/23 EPS estimate by 3/4 percent but said that the focus on recycling balance sheet and achieving 18 percent RoE are the key positives.
It maintained an Overweight rating with a TP of Rs 1,815 per share.
Morgan Stanley
The brokerage has an Overweight rating on the stock and raised the target price to Rs 1,816 per share.
"The guidance will be a discussion point but it’s delivered in far tougher fiscal. The flat margin is a positive outcome, however, the valuations remain compelling," Morgan Stanley said.
Bernstein
"The message of significant optimism & control over the business will please the markets," the brokerage house said.
It maintained an Outperform rating with a TP of Rs 1,708 apiece.
Motilal Oswal
"We broadly maintain our consolidated earnings estimate. We expect L&T to witness Core E&C revenue/EBITDA/adjusted PAT CAGR of 12%/11%/17% over FY21-23E. Our estimates largely account for commodity price inflation risk," Motilal Oswal said.
It maintained a Buy call with a target of Rs 1,700 per share.
ICICI Direct
ICICI Direct expects L&T to deliver standalone revenue CAGR of 12 percent, EBITDA CAGR of 11.8 percent and PAT CAGR of 15.1 percent in FY21-23E.
It has a Buy call with a TP of Rs 1,700.
Kotak Institutional Equities 
"The stage is set for the company to deliver high-teens profit CAGR over FY20-23. We do not expect hiccups along the way given the strength of the backlog," the brokerage firm said.
It maintained a Buy rating with a target price of Rs 1,850.
Yes Securities
Yes Securities remains optimistic over the medium to long-term growth. It maintained Buy rating on the stock for revised target price of Rs 1,643 (based on SOTP valuation).
At 10:10 am, the shares of L&T were trading 1.79 percent lower at Rs 1,390.20 apiece on the BSE.
 
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