The Engineering and capital goods major, Larsen and Toubro (L&T) declared its fourth quarter results on Wednesday.

Share Market Live

NSE

Revenues at Rs 58,335 crore improved 10 percent year on year, but came in below expectations of Rs 59,300 crore. The company says its performance was aided by strong execution of a large order book in the Infrastructure Projects segment and robust momentum in the IT&TS portfolio. Of the total revenues, share of international revenues stood at 39 percent.

Jefferies has a Buy rating on the stock with target price raised to Rs 2,900. The brokerage says quality of earnings is improving with NWC at 16.1 percent vs 19.9 percent year on year.

A key highlight from the capital goods major in its fourth quarter results yesterday was that not only did it beat three of four FY23 guidance targets, but it guided for an even stronger FY24 on a higher base. CLSA has a buy rating on the stock with target price of Rs 2,790. The brokerage says "While core E&C margin decline disappointed, the company's actions to improve return ratios (+110bps) should sooth nerves."

Goldman Sachs views weak margins offsetting an otherwise strong outlook. It adds that the strong momentum in order execution, green shoots in private capex (typically higher margin) and focus on sale/refinancing of non-core assets, reaffirms a positive view on the stock. Although weak margins have disappointed the street. Core EBITDA margins came in at 8.7 percent, flat quarter on quarter and 80 bps lower than Q4FY22.

The stock is down nearly 4 percent in trade on Thursday morning.