L&T: Diwali Muharat Picks by Emkay

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25.6x FY2012E
CMP : Rs2,147
RECO : ACCUMULATE
TP : Rs2,129

Investment Rationale
§ Strong presence in structural sectors (Utilities and Construction – exposure at 65%) to continue to augur well
during FY10-12E

§ Clear skies for core business - niggling issues w.r.t execution cleared

§ Constraints in execution of projects addressed

§ Achieved financial closure on all 4 BOT projects bagged under L&T IDPL

§ Higher generation of enquiries in the system

§ With 35% exposure to industrial sectors, L&T to be key beneficiary of likely pick up in industrial capex

§ Strong presence across the spectrum in Industrial capex

§ We prefer exposure to Industrial capex over structural - Industrial capex expected to strengthen in FY11E
and broaden in FY12E

§ Order backlog at Rs1.1 tn in Q2FY11 – best ever visibility at 2.9X FY10 standalone revenues

§ Satisfactory progress in subsidiaries– L&T Finance, L&T Infra Finance, L&T Shipbuilding, TAMCO, L&T UIDPL

Valuations
§ At CMP, the stock is trading at 31.1X FY11E and 25.6X FY12E consolidated earnings of Rs69.0 and Rs84.0 per
share respectively