RESULTS REVIEW 1QFY17

1 AUG 2016

Larsen & Toubro

NEUTRAL
INDUSTRY

CAPITAL GOODS

CMP (as on 29 Jul 2016)

Rs 1,559

Target Price

Rs 1,461

Nifty

8,639

Sensex

28,052

KEY STOCK DATA

Bloomberg

LT IN

No. of Shares (mn)

932

MCap (Rs bn) / ($ mn)

1,451/21,672

6m avg traded value (Rs mn)

2,928

STOCK PERFORMANCE (%)

52 Week high / low

Rs 1,844 / 1,016
3M

6M

12M

Absolute (%)

24.3

41.5

(12.9)

Relative (%)

14.7

28.7

(14.7)

SHAREHOLDING PATTERN (%)

Promoters

FIs & Local MFs

41.05

FIIs

16.98

Public & Others

41.97

Source : BSE

Pawan Parakh, CFA

pawan.parakh@hdfcsec.com
+91-22-6171-7330

Slight disappointment
L&Ts 1QFY17 results were marginally below our
expectation as the core EPC revenue grew 6% YoY
(vs. expectation of 11%) and EPC EBIT margins
declined 30bps YoY (vs. our estimate of 40bps
improvement). Order inflows stood at Rs 297bn (14%
YoY), but its unclear whether they included the large
orders announced post-Jun-16. Working capital (as
percentage of sales) remained at FY16-end levels of
~24%. While we are yet to formulate our new
estimates, the management expects its Ind AS
revenues to be ~Rs 1tn. It continues to maintain its
guidance on margins (50bps improvement on new
revised base) and order inflows (~15% YoY growth).
After the recent run-up, the stock leaves little room
for disappointment. Working capital, an important
metric for L&T, remains high. There is risk to L&Ts
order inflows from the Middle East (crude witnessing
fall) and the defence segment (slow momentum). We
believe the stock factors in all the positives and is
more than fairly valued. We maintain NEUTRAL with
an SOTP-based TP of Rs 1,461 (22x FY18E P/E for the
core EPC business).
Financial Summary (Consolidated)
Rs mn
1QFY17
Net Sales
218,738
EBITDA
19,050
PAT
6,096
Diluted EPS (Rs)
6.5
P/E (x)
EV / EBITDA (x)
RoE (%)
Source: Company, HDFC sec Inst Research

1QFY16
200,482
16,411
4,189
4.5

YoY (%)
9
16
46
46

Highlights of the quarter

Among the major subsidiaries/JVs, L&T didnt

consolidate MHI JV, Forging JV and most IDPL
projects (except Nabha Power, Kattupalli Port and
Hyderabad Metro). However, the impact of MHI JV
was limited as most of its revenue was intercompany. Ageing provisions for receivables/
employee benefit provision (cumulative to the
tune of Rs 2.7bn) accounted for most of the
deviation under IGAAP and Ind AS PAT.

Margins improved in power (strong execution) and

heavy engineering (no large provisions unlike
1QFY16). While the infrastructure segments
performance was tepid (9% YoY revenue growth
and 30bps margin improvement), the others were
in EBIT losses (-4% for 1QFY17), with lower real
estate revenues and the merger of the MMH
segment.

Near-term outlook: We believe the stock is closer

to fair valuations, limiting meaningful upsides.

4QFY16
331,570
48,592
24,051
25.8

QoQ (%)
(34)
(61)
(75)
(75)

FY15
851,284
138,898
45,467
49.1
31.8
15.7
12.7

FY16P
FY17E
FY18E
920,046 1,026,317 1,128,817
154,937 173,325 191,771
44,171
47,324
56,221
47.5
50.8
60.4
32.8
30.7
25.8
14.5
13.4
12.8
11.2
11.1
12.2

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Consolidated Quarterly Financials Snapshot

International sales (+19% YoY)
led revenue growth.
International sales were driven
by power projects in
Bangladesh and large
infrastructure projects in the
Middle East

Non-consolidation of MHI JV,

Forging JV and most of the
IDPL projects (except Nabha,
Kattupalli and Hyd metro) led
to a sharp reduction in
depreciation and interest
expense

(Rs mn)
Net Sales
Material Expenses
Employee Expenses
SG&A Expenses
EBITDA
Interest Cost
Depreciation
Other Income
PBT
Tax
Adj PAT
Extraordinary items
Reported PAT

1QFY17
218,738
149,750
34,200
15,738
19,050
3,375
4,648
3,024
14,052
5,488
6,096
0
6,096

1QFY16
200,482
139,006
31,494
13,572
16,411
3,893
4,658
2,833
10,692
4,282
4,189
0
4,189

YoY (%)
9

4QFY16
331,570
244,355
22,421
16,203
48,592
7,737
8,203
2,182
35,319
9,537
24,051
(485)
23,566

16

46
46

QoQ (%)
FY16
(34) 1,026,317
652,099
139,515
61,378
(61)
173,325
30,412
27,560
39
15,411
80,867
25,487
(75)
47,324
3,581
(74)
50,905

FY16
920,046
590,543
120,034
54,531
154,937
28,507
26,225
13,549
72,172
22,836
44,171
3,477
47,648

YoY (%)
12

12

14

7
7

Source: Company, HDFC sec Inst Research

Margin Analysis (Standalone)

Material Expenses As % Of Net Sales
Employee Expenses As % Of Net
Sales
Other Op. Exps As % Of Net Sales
Operating Margin (%)
Net Profit Margin (%)

1QFY17
68.5

1QFY16
69.3

YoY (%)
-88

4QFY16
73.7

QoQ (%)
-524

FY16
63.5

FY16
64.2

YoY (%)
-65

15.6

15.7

-7

6.8

887

13.6

13.0

55

7.2
8.7
2.8

6.8
8.2
2.1

43
52
70

4.9
14.7
7.3

231
-595
-447

6.0
16.9
4.6

5.9
16.8
4.8

5
5
-19

Source: Company, HDFC sec Inst Research

Page | 2

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Segmental Quarterly Performance (Consolidated)

The power segments revenues
were driven by improved
execution in international
power orders (primarily the
Bangladesh project)

MMH has been merged with

others segment as its
contribution was less than 10%
in revenue/EBIT and assets

(Rs mn)
Segmental Revenues
-Infrastructure
-Power
-Heavy engineering
-Hydrocarbon
Engineering & Construction
-Electrical And Automation
-IT and TS
-Financial Services
-Developmental Projects
-Others
-Intersegment Revenue
Total
EBIT
-Infrastructure
-Power
-Heavy engineering
-Hydrocarbon
Engineering & Construction
-Electrical And Automation
-IT and TS
-Financial Services
-Developmental Projects
-Others
Total

1QFY17

1QFY16

YoY (%)

4QFY16

92,875
17,227
7,338
21,457
138,897
10,812
23,749
20,907
13,831
18,181
(7,640)
218,738

85,043
10,788
6,444
21,546
123,821
11,140
20,633
17,817
11,382
21,223
(5,533)
200,482

9
60
14
(0)
12
(3)
15
17
22
(14)
38
9

186,549
21,850
10,721
24,875
243,994
15,992
23,631
19,964
12,996
29,520
(12,109)
333,987

6,791
891
671
94
8,447
361
4,550
2,545
980
(720)
16,162

5,933
(84)
239
124
6,213
210
3,201
1,838
436
1,547
13,444

14
(1,165)
180
(25)
36
72
42
38
125
(147)
20

29,147
1,977
(234)
(920)
29,971
2,083
4,292
2,114
622
3,482
42,564

QoQ (%)

FY16

(50)
503,869
(21)
70,107
(32)
33,232
(14)
88,398
(43)
695,605
(32)
54,463
1
91,166
5
75,412
6
51,461
(38)
99,717
(37) (32,602)
(35) 1,035,222
(77)
(55)
(386)
(110)
(72)
(83)
6
20
57
(121)
(62)

52,741
5,926
(1,920)
(154)
56,592
4,989
16,983
10,285
6,219
11,698
106,765

FY16 YoY (%)

448,376
47,408
36,239
74,316
606,339
54,595
76,589
64,005
51,972
100,308
(26,191)
927,617

12
48
(8)
19
15
(0)
19
18
(1)
(1)
24
12

42,510
5,486
2,270
(13,428)
36,838
5,492
13,165
10,158
16,809
14,311
96,773

24
8
(185)
(99)
54
(9)
29
1
(63)
(18)
10

Source: Company, HDFC sec Inst Research

Page | 3

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Segmental Margins (EBIT, Consolidated)

Margins improved
substantially in power
(improved execution) and
heavy engineering (absence of
one-off provisions unlike
1QFY16)

(%)
Infrastructure
Power
Heavy Engineering
Hydrocarbon
Electrical And Automation
IT and TS
Financial Services
Developmental Projects
Others

1QFY17
7.3
5.2
9.1
0.4
3.3
19.2
12.2
7.1
(4.0)

1QFY16
7.0
(0.8)
3.7
0.6
1.9
15.5
10.3
3.8
7.3

YoY (%)
34
595
542
NM
145
365
186
325
-1125

4QFY16
15.6
9.0
(2.2)
(3.7)
13.0
18.2
10.6
4.8
11.8

QoQ (%)
-831
-387
1132
NM
-969
99
159
229
-1576

FY16
10.5
8.5
(5.8)
(0.2)
9.2
18.6
13.6
12.1
11.7

FY16
9.5
11.6
6.3
(18.1)
10.1
17.2
15.9
32.3
14.3

YoY (%)
99
-312
-1204
NM
-90
144
-223
-2026
-254

Source: Company, HDFC sec Inst Research

Segmental Quarterly Performance (Standalone)

Standalone revenue growth

was lower than consolidated
in the absence of IT&TS
segment

(Rs mn)
Net Sales
Material Expenses
Employee Expenses
SG&A Expenses
EBITDA
Interest Cost
Depreciation
Other Income
PBT
Tax
Adj PAT
E/o (adj for tax)
Reported PAT

1QFY17
121,500
92,441
12,898
6,520
9,642
3,311
2,793
4,826
7,863
2,396
5,967
(500)
5,467

1QFY16
114,437
88,423
11,452
6,046
8,515
3,154
2,688
5,222
7,895
2,263
5,632
0
5,632

YoY (%)
6

QoQ (%)
(42)

(3)

4QFY16
210,613
162,131
10,372
6,178
31,932
3,973
2,545
7,367
32,007
6,616
26,164
(773)
25,391

Margin Analysis - Standalone

Material Expenses As % Of Net Sales
Employee Expenses As % Of Net Sales
Other Operating Expenses As % Of Net Sales
Operating Margin (%)
Net Profit Margin (%)

1QFY17
76.1
10.6
5.4
7.9
4.9

1QFY16
77.3
10.0
5.3
7.4
4.9

YoY (%)
-119
61
8
49
-1

4QFY16
77.0
4.9
2.9
15.2
12.4

QoQ (%)
-90
569
243
-723
-751

13

(8)

(70)

(34)

(77)
(78)

Source: Company, HDFC sec Inst Research

Page | 4

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Segmental Quarterly Performance (Standalone)

Most segments registered
growth except others, which
was marred by lower real
estate/MMH sales

Negative operating leverage

led to the others segment
reporting EBIT losses

(Rs mn)
Segmental Revenues
-Infrastructure
-Power
-Heavy engineering
Engineering & Construction
-Electrical And Automation
-Others
-Intersegment Revenue
Total
EBIT
-Infrastructure
-Power
-Heavy Engineering
Engineering & Construction
-Electrical And Automation
-Others
Total
Segmental Margins (EBIT)(%)
-Infrastructure
-Power
-Heavy Engineering
-Electrical And Automation
-Others

1QFY17

1QFY16

YoY (%)

4QFY16

QoQ (%)

FY16

FY16

YoY (%)

80,740
17,227
6,748
104,714
8,435
10,856
(2,505)
121,500

78,394
10,788
6,001
95,183
8,474
12,643
(1,863)
114,437

3
60
12
10
(0)
(14)
34
6

159,488
19,005
9,462
187,956
12,360
16,836
(4,833)
212,318

(49)
(9)
(29)
(44)
(32)
(36)
(48)
(43)

421,753
64,513
29,349
515,614
42,284
59,113
(12,861)
604,150

406,520
44,590
32,993
484,102
41,294
61,307
(11,122)
575,581

4
45
(11)
7
2
(4)
16
5

6,141
891
702
7,735
784
(33)
8,485

5,894
(84)
349
6,159
635
419
7,213

27,567
494
(99)
27,963
1,789
1,852
31,604

44,424
2,015
3,361
49,800
5,039
8,921
63,760

13
15
(122)
4
(1)
(33)
(1)

7.5
(0.8)
5.8
7.5
3.3

(78)
80
(811)
(72)
(56)
(102)
(73)
QoQ (bps)
-968
257
1145
-518
-1130

50,366
2,314
(746)
51,934
5,010
5,982
62,926

7.6
5.2
10.4
9.3
(0.3)

4
(1,165)
101
26
23
(108)
18
YoY (bps)
9
595
460
179
-362

11.9
3.6
(2.5)
11.8
10.1

10.9
4.5
10.2
12.2
14.6

101
-93
-1273
-35
-443

17.3
2.6
(1.0)
14.5
11.0

Source: Company, HDFC Sec Inst Research

Page | 5

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

EBITDA (Consolidated)

Infra continues to dominate

the order inflow and backlog

1QFY16
8.9%
1.2%
8.9%
2.3%
5.8%
18.4%
5.9%
12.0%

Infrastructure
Power
Heavy Engineering
Hydrocarbon
Electrical And Automation
IT & Technology Services
Developmental Projects
Others

2QFY16
8.6%
16.1%
-15.9%
2.9%
12.9%
21.1%
25.9%
18.9%

3QFY16
7.9%
10.5%
1.6%
4.2%
12.4%
22.8%
25.0%
26.1%

4QFY16
16.4%
11.5%
2.5%
-1.7%
18.5%
21.4%
26.4%
17.5%

1QFY17
9.2%
5.8%
14.9%
2.0%
7.8%
21.9%
9.8%
-0.2%

Source: Company, HDFC sec Inst Research

Consolidated order inflows for

the quarter grew 14% YoY to
Rs 297bn. Core E&C order
inflows also witnessed robust
growth of ~14% YoY to Rs
240.6bn

Consolidated Order Inflow

Services
19%

Consolidated Order Backlog

Others
5%

Hydrocarbon
8%

Others
7%

E&A
1%
Infra
40%

Heavy Engg
3%
Process
0%

Power
1%

Consequently, the order book

expanded 8.4% YoY to Rs
2.57tn, providing substantial
revenue visibility

Services
0%

Power
7%

Hydrocarbon
27%
E&A
4%

Heavy Engg
4%

Process
0%

Infra
74%
W

Source: Company, HDFC sec Inst Research

Source: Company, HDFC sec Inst Research

Page | 6

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Valuation Summary
We assign 22x P/E to FY18E
core E&C business EPS to
arrive at our SOTP-based TP of
Rs 1,461/share

L&T core EPC business

L&T Infotech
L&T Finance Holding
L&T Development Portfolio
TARGET PRICE

Value (Rs mn)

1,087,429
157,347
118,409
77,600
1,440,785

Value per share

1,167
143
69
81
1,461

Basis of valuation
22x FY18E EPS
12x FY18E EPS; 20% Holdco Disc
20% Holdco Disc. to Market cap
0.8x invested equity

Source: Company, HDFC sec Inst Research

Peer Valuation
Company

MCap
(Rs bn)

CMP
(Rs)

Rating

TP
(Rs)

Crompton Greaves
Cummins India
Inox Wind
Kalpataru Power *
KEC International
L&T
Suzlon Energy
Techno Electric
Thermax
Triveni Turbine
Voltas

49
245
50
42
37
1,451
105
39
105
40
116

78
884
224
272
143
1,559
18
689
880
122
350

BUY
BUY
BUY
BUY
BUY
NEU
BUY
BUY
NEU
BUY
NEU

76
940
475
330
160
1,444
28
614
686
128
310

Adj. EPS (Rs/sh)

FY16E FY17E FY18E
2.1
3.2
4.3
27.1
28.3
31.4
20.4
24.5
31.5
13.0
15.5
17.5
7.4
9.8
10.6
50.8
60.4
70.3
-0.3
1.0
2.0
24.7
27.5
33.0
23.4
26.5
27.4
3.3
3.7
4.3
10.4
12.2
14.4

FY16E
37.9
32.6
11.0
20.9
19.2
30.7
-51.0
27.9
37.7
37.4
33.6

P/E (x)
FY17E
24.5
31.2
9.1
17.6
14.6
25.8
17.3
25.1
33.3
33.0
28.6

FY18E
18.4
28.2
7.1
15.6
13.5
22.1
8.7
20.8
32.1
28.6
24.4

EV/EBITDA (x)
FY16E FY17E FY18E
14.6
10.0
9.0
31.7
29.3
25.8
8.5
6.0
4.9
9.9
9.7
8.6
8.7
7.5
7.1
13.4
12.8
11.6
15.0
10.2
7.6
18.7
14.0
12.1
21.9
20.3
18.1
23.3
20.2
17.2
25.1
21.3
18.0

FY16E
2.9
24.8
27.9
9.2
13.5
11.1
2.4
12.2
12.4
41.3
15.3

ROE (%)
FY17E
4.2
22.5
25.8
10.0
15.5
12.2
-10.1
14.3
12.8
36.9
15.1

FY18E
5.5
23.6
26.7
10.3
14.7
13.0
-27.6
15.1
12.2
33.9
16.7

Source : Company, HDFC sec Inst Research

Page | 7

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Income Statement
(Rs mn)
Net Revenues
Growth (%)

Balance Sheet
FY14
851,284

FY15

FY16E

FY17E

FY18E

920,046 1,026,317 1,128,817 1,246,809

(Rs mn)

FY14

FY15

FY16E

FY17E

FY18E

1,854

1,859

1,863

1,863

1,863

SOURCES OF FUNDS

14.3

8.1

11.6

10.0

10.5

Share Capital

Material Expenses

560,838

590,543

652,099

722,443

797,958

Reserves

375,262

407,232

438,054

477,409

523,279

Employee Expenses

104,998

120,034

139,515

147,087

158,976

Total Shareholders Funds

377,116

409,091

439,917

479,272

525,142

SG&A Expenses

46,549

54,531

61,378

67,516

74,268

Minority Interest

31,792

49,986

67,688

69,757

72,033

Total Expenses

712,386

765,108

852,992

937,046 1,031,202

Long-term Debt

584,116

681,830

737,537

786,999

812,919

EBIDTA

275,529

294,007

303,690

138,898

154,937

173,325

191,771

215,608

Short-term Debt

254,006

254,206

EBIDTA %

16.3

16.8

16.9

17.0

17.3

Total Debt

838,123

936,036 1,013,066 1,081,006 1,116,610

EBIDTA Growth %

13.8

11.5

11.9

10.6

12.4

14,458

26,225

27,560

28,944

31,939

124,440

128,712

145,765

162,826

183,669

13,370

13,549

15,411

10,120

10,541

Deferred Taxes
3,375
(1,846)
(3,918)
(3,918)
(3,918)
Long-term Provisions &
13,984
18,466
7,883
8,710
9,621
Others
TOTAL SOURCES OF FUNDS 1,264,389 1,411,733 1,524,636 1,634,827 1,719,487

62,981

70,089

80,310

85,985

93,052

PBT

74,830

72,172

80,867

86,961

101,158

Tax

26,284

22,836

25,487

28,697

33,382

Investments

Depreciation
EBIT
Other Income (Including EO
Items)
Interest

RPAT

APPLICATION OF FUNDS
Net Block

322,950

347,381

432,816

452,123

479,016

CWIP

142,810

155,237

174,899

176,648

167,816

14,328

16,468

19,744

22,244

24,744

355,861

464,622

585,210

592,683

643,881

55,275

65,182

53,620

69,275

76,517

Debtors
ST Loans & Advances,
Others
Cash & equivalents

263,846

300,894

359,899

371,118

409,910

425,632

446,608

500,958

507,355

551,182

108,114

138,208

140,073

77,941

67,312

Total Current Assets

852,866

950,892 1,054,549 1,025,690 1,104,920

Creditors
Other Current Liabilities &
Provns
Total Current Liabilities

395,157

487,615

705,681

593,788

655,856

29,269

35,251

36,900

40,772

45,034

424,426

522,866

742,581

634,561

700,890

474

(1,689)

(4,475)

(2,043)

(2,248)

LT Loans & Advances

49,020

47,648

50,905

56,221

65,528

Inventories

3,553

3,477

3,581

45,467

44,171

47,324

56,221

65,528

(12.7)

(2.9)

7.1

18.8

16.6

49.1

47.5

50.8

60.4

70.3

EPS growth %
(42.0)
Source: Company, HDFC sec Inst Research

(3.1)

6.9

18.8

16.6

Minority Interest
EO (Loss) / Profit (Net Of Tax)
APAT
APAT growth %
Adjusted EPS (Rs)

Net Current Assets

428,440 428,026 311,968 391,129 404,030
TOTAL APPLICATION OF
1,264,389 1,411,733 1,524,636 1,634,827 1,719,487
FUNDS
Source: Company, HDFC sec Inst Research

Page | 8

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

Cash Flow
(Rs mn)

Key Ratios
FY14

FY15

FY16E

FY17E

FY18E

74,830

72,172

80,867

86,961

101,158

PROFITABILITY %

(13,370)

(13,549)

(15,411)

(10,120)

(10,541)

Interest

31,380

28,507

30,412

32,458

Depreciation

14,458

26,225

27,560

28,944

Working capital change

(51,860)

41,382

11,392

(90,108)

(10,204)

RoE

Tax Paid

(26,284)

(22,836)

(25,487)

(28,697)

(33,382)

(103)

(7,906)

(12,783)

(2,043)

(2,248)

29,051

123,997

96,550

17,395

110,927

EFFICIENCY

(56,096) (127,919)

(50,000)

(50,000)

Tax rate %

Reported PBT
Non-operating & EO items

Other operating items

OPERATING CASH FLOW (a)

FY14

FY15

FY16E

FY17E

FY18E

GPM

34.1

35.8

36.5

36.0

36.0

34,206

EBITDA margin

16.3

16.8

16.9

17.0

17.3

31,939

APAT margin

5.3

4.8

4.6

5.0

5.3

12.7

11.2

11.1

12.2

13.0

Core RoCE

7.7

7.2

7.5

7.4

7.7

RoCE

8.2

7.4

7.3

7.5

7.9

35.1

31.6

31.5

33.0

33.0

2.1

2.0

1.7

1.8

1.9

Capex

(61,637)

Free Cash Flow

(32,587)

67,901

(31,369)

(32,605)

60,927

Fixed Asset Turnover (x)

Investments

(2,086)

(2,140)

(3,276)

(2,500)

(2,500)

Inventory (days)

23.7

25.9

19.1

22.4

22.4

Non-operating Income

13,370

13,549

15,411

10,120

10,541

Debtors (days)

113.1

119.4

128.0

120.0

120.0

(44,687) (115,783)

(42,380)

(41,959)

Payables (days)

169.4

193.4

251.0

192.0

192.0

(32.6)

(48.2)

(103.9)

(49.6)

(49.6)

INVESTING CASH FLOW (b)

Debt Issuance/(Repaid)
Interest
FCFE
Share Capital Issuance

(50,353)
60,158

(4,265)

68,018

12,178

(25,734)

Cash Conversion Cycle (days)

(31,380)

(28,507)

(30,412)

(32,458)

(34,206)

Debt/EBITDA (x)

6.0

6.0

5.8

5.6

5.2

(3,808)

35,129

6,238

(52,885)

987

Net D/E (x)

1.9

2.0

2.0

2.1

2.0

2,880

3,886

Interest Coverage (x)

2.0

1.8

1.8

1.9

2.0

PER SHARE DATA (Rs)

Minority Interest
Dividend

(13,987)

(16,449)

(20,395)

(16,866)

(19,659)

EPS

49.1

47.5

50.8

60.4

70.3

FINANCING CASH FLOW (c)

17,672

(49,215)

21,097

(37,147)

(79,599)

CEPS

64.7

75.7

80.4

91.4

104.6

NET CASH FLOW (a+b+c)

(3,631)

30,094

1,864

(62,131)

(10,630)

Dividend

14.3

16.3

18.2

16.5

19.2

108,114

138,208

140,073

77,941

67,312

406.9

440.1

472.3

514.5

563.8

31.8

32.8

30.7

25.8

22.1

3.8

3.5

3.3

3.0

2.8

15.7

14.5

13.4

12.8

11.6

EV/Revenues

2.6

2.4

2.3

2.2

2.0

OCF/EV (%)

1.3

5.5

4.2

0.7

4.4

FCF/EV (%)

(1.5)

3.0

(1.3)

(1.3)

2.4

FCFE/MCAP (%)

(0.3)

2.4

0.4

(3.6)

0.1

Closing cash

Source: Company, HDFC sec Inst Research

Book Value
VALUATION
P/E
P/BV
EV/EBITDA

Source: Company, HDFC sec Inst Research

Page | 9

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

RECOMMENDATION HISTORY
L&T

Date
1-Feb-16
26-May-16
5-Jul-16
1-Aug-16

TP

1,800
1,600

CMP
1,099
1,292
1,565
1,559

Reco
BUY
BUY
NEU
NEU

Target
1,222
1,422
1,444
1,461

1,400
1,200

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

1,000

Rating Definitions
BUY
: Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period
SELL
: Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Page | 10

LARSEN & TOUBRO : RESULTS REVIEW 1QFY17

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Page | 11