Infra development is largest capital employed segment of L&T (38%). Company said that the Infra development business is characterized by a)
high leverage, b) exclusivity, c) long concession and d) back ended returns. Investors comfortable with these should invest in Infrastructure developers. Project costs are up (4-14%) on higher interest during construction, project delays, diesel costs and INR depreciation. L&T expects Dhamra port losses to reduce to Rs1.2bn vs Rs3.4bn led by 50% growth in cargo / leverage.
According to BOFA Merrill L&T is expected to Report an EPS of Rs 53 and Rs 60 for Fy 14 /15 respectively with a NEUTRAL stock recommendation and target price of Rs 990
According to JP Morgan L&T is expected to Report an EPS of Rs 54 and Rs 60 for Fy 14 /15 respectively with a OVERWEIGHT stock recommendation and target price of Rs 955 on sum of the parts valuation
