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L&T bags order worth `3,500cr
Larsen & Toubro (L&T) has bagged an order worth `3,500cr from PPN Power Generating
Company, a company whose main promoter is the Apollo Group, for setting up a
3x360MW gas-based power plant at Nagapattinam district, Tamil Nadu. 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
Mitsubishi Heavy Industries, Japan. With this order the outstanding order book stands at
~`1,19,482cr (2.6x FY2011E revenue), providing revenue visibility.
At the CMP of `1,516, the stock is trading at 18.3x FY2013E earnings and 3.1x FY2013E
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 `2,034, which
provides 34.2% upside from current levels. We recommend Buy on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
L&T bags order worth `3,500cr
Larsen & Toubro (L&T) has bagged an order worth `3,500cr from PPN Power Generating
Company, a company whose main promoter is the Apollo Group, for setting up a
3x360MW gas-based power plant at Nagapattinam district, Tamil Nadu. 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
Mitsubishi Heavy Industries, Japan. With this order the outstanding order book stands at
~`1,19,482cr (2.6x FY2011E revenue), providing revenue visibility.
At the CMP of `1,516, the stock is trading at 18.3x FY2013E earnings and 3.1x FY2013E
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 `2,034, which
provides 34.2% upside from current levels. We recommend Buy on the stock.
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