Reuters logo
CORRECTED-MARKET EYE-Credit Suisse downgrades L&T to underperform
November 7, 2012 / 6:07 AM / 5 years ago

CORRECTED-MARKET EYE-Credit Suisse downgrades L&T to underperform

(Corrects headline and first bullet to say the stock was
downgraded to 'underperform' from 'neutral')
* Credit Suisse downgrades Larsen & Toubro 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 0555 GMT, shares were up 0.81 percent at 1,679 rupees.

 (manoj.dharra@thomsonreuters.com)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below