Motilal Oswal is bullish on Larsen and Toubro (L&T) and has recommended buy rating on the stock with a target of Rs 1670 in its June 21, 2012 research report.
Over the years, LT has continuously evolved through building new skill sets and competencies to effectively benefit from emerging trends and opportunities through out economic cycles in several business/geographic segments. LT has acquired higher adaptability, enabling it to seize macro opportunities and weather volatility better than its peers. In the last few years, Buildings & Factories, Process Industries and Power have been the key growth drivers while, Overseas Markets, Urban Infrastructure and Railways are likely to emerge as key growth drivers.
LT had instituted a very strong risk management process in 2005, which led to a structural change in reported margins (from 7-8% to 12-13%), driven by tight control on project profitability and cash flows. LT has preferred to withdraw rather than bid aggressively to