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L&T bags order worth `1,100 cr
Larsen & Toubro (L&T) has bagged an order worth `1,100cr from Gujarat State Electricity
Corporation, a Government of Gujarat company, for setting up 375MW gas-based power
plant at Dhuvaran, near Baroda in Gujarat. L&T will design, supply, install and commission
the entire power project on a turnkey basis. The company will procure advance gas turbines
and high-efficiency steam turbines for the plant from Siemens AG, Germany. The expected
period of execution is 30 months from the date of notice to proceed. With this order, the
outstanding order book stands at ~`1,15,982cr (2.6x FY2011E revenue), providing revenue
visibility.
At the CMP of `1,661, the stock is trading at 24.5x FY2012E earnings and 4x FY2012E
P/BV, on a standalone basis. We have used the SOTP methodology to value the company to
capture all its business initiatives and investments/stakes in the different businesses. Ascribing
separate values to its parent business on a P/E basis and investments in subsidiaries on P/E,
P/BV and mcap basis, our Target Price works out to `1,964, which provides an 18.2% upside
from current levels. We recommend a Buy view on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L&T bags order worth `1,100 cr
Larsen & Toubro (L&T) has bagged an order worth `1,100cr from Gujarat State Electricity
Corporation, a Government of Gujarat company, for setting up 375MW gas-based power
plant at Dhuvaran, near Baroda in Gujarat. L&T will design, supply, install and commission
the entire power project on a turnkey basis. The company will procure advance gas turbines
and high-efficiency steam turbines for the plant from Siemens AG, Germany. The expected
period of execution is 30 months from the date of notice to proceed. With this order, the
outstanding order book stands at ~`1,15,982cr (2.6x FY2011E revenue), providing revenue
visibility.
At the CMP of `1,661, the stock is trading at 24.5x FY2012E earnings and 4x FY2012E
P/BV, on a standalone basis. We have used the SOTP methodology to value the company to
capture all its business initiatives and investments/stakes in the different businesses. Ascribing
separate values to its parent business on a P/E basis and investments in subsidiaries on P/E,
P/BV and mcap basis, our Target Price works out to `1,964, which provides an 18.2% upside
from current levels. We recommend a Buy view on the stock.
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