Ways2Capital Reviews : L&T Q4: Strong Order Flows, Margins Build Case For Re-rating Of Stock

Finally, engineering juggernaut Larsen and Toubro Ltd (L&T) looks set for a rerating. After many quarters of slips and disappointments, the firm ticked off all the boxes on the analysts’ radar, with the best news coming on order flows and margin expansion.

In the limelight was the Rs49,577 crore order flow during the quarter, which was the highest in the company’s history.

Interestingly, the break-up shows higher traction in domestic orders compared to international ones. The 11% growth in orders in the infrastructure segment mirror a pickup in domestic investment activity in the second half of FY18. However, only one-third of the orders in the year came from the private sector. Given the excess capacity in most sectors and a stressed banking environment, it may take several quarters for the private sector capex to gain momentum.

Although L&T had ventured into overseas markets a few years ago to tide over the slowdown on home ground, the firm has now turned cautious in these markets. “Hardening of oil prices, fluctuation in commodity prices and currency movements have infused volatility in the economies and businesses,” it said in a media release.
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About Bhoomi Desai