Credit Suisse downgrades L&T to underperform
Reuters Market Eye - Credit Suisse downgrades Larsen & Toubro (LART.NS) to 'underperform' from 'neutral', on concerns about deteriorating order flow mix and rising working capital cycle, which could impact margins and cash generation.
Over 40 percent of L&T's orders are from the Middle East and real estate segments which are "prone to execution delays" and would earn lower margin.
It would be difficult for L&T to sustain this growth momentum on its historic high inflows, Credit Suisse said in a note.
Credit Suisse believes L&T is expensive at 17.5 times FY14 parent EPS for 10 percent EPS CAGR (FY12-14E) and also does not expect any material improvement in return on equity.
At 11:25 p.m., shares were up 0.81 percent at 1,679 rupees.
- Tweet this
- Share this
- Digg this
Trending On Reuters
The Reserve Bank and the finance ministry have agreed, in the biggest change to monetary policy since opening up India's economy more than two decades ago, to introduce inflation targetting to rein in a long history of volatile price rises. Full Article | Factbox
China Feb HSBC PMI at seven-month high but more rate cuts seen on the cards Full Article