Global brokerage firm Jefferies has given an Upside target of 18 percent for the stock, citing strong revenue growth, Improvement in margin, and expectation of higher order inflow from macroeconomic improvement.
Target & Rationale
Global Brokerage firm Jefferies has given two targets for the Engineering giant L&T, with the base case target of Rs. 3,965 and the Optimistic case target of Rs. 4,310. An upside of 8.30 percent and 17.75 percent, respectively. Brokerage states that the target for the stock of Rs. 3,965 is driven by the 18 percent revenue CAGR growth and higher margin expectation in its hydrocarbon and heavy engineering divisions.
Further for the Rs. 4,310 target by the brokerage is given by the expectation of revival in the macro investment cycle, which could lead to a surge in order inflows for L&T and leading to a Valuation rerating.
Further, Jefferies cautions that L&T’s performance could be impacted by potential risks, including lower-than-expected domestic order inflows and continued margin pressures in the Middle East.
As of FY25, L&T’s total order book stood at Rs. 5,79,100 crore. Of this, Infrastructure contributed Rs. 3,59,042 crore (62%), Energy Rs. 1,62,148 crore (28%), Hi-Tech Manufacturing Rs. 40,537 crore (7%), and others Rs. 17,373 crore (3%). Geographically, orders from India accounted for Rs. 3,12,714 crore (54%), the Middle East Rs. 2,14,267 crore (37%), and the Rest of the World Rs. 52,119 crore (9%).
Financial Highlights
The company reported a 10.90 percent YoY increase in revenue from Rs. 67,079 Crore in Q4FY24 to Rs. 74,392 Crore in Q4FY25. On a QoQ basis, the company reported an increase of 15.03 percent in revenue from Rs. 64,668 Crore in the previous quarter.
Their Net profit saw an increase of 22.80 percent YoY from Rs. 5,013 Crore to Rs. 6,156 Crore for the same period. On a QoQ basis, the company reported an increase of 54.90 percent in Net profit from Rs. 3,974 Crore in the previous quarter.
Established by Danish engineers Henning Holck-Larsen and Søren Kristian Toubro, Larsen & Toubro Limited (L&T) is a prominent Indian multinational conglomerate headquartered in Mumbai. The company is renowned for executing large-scale projects such as metro systems in multiple Indian cities and defence equipment manufacturing.
L&T operates across diverse sectors, including engineering, procurement, and construction (EPC) projects, hi-tech manufacturing, and services. Its business portfolio encompasses infrastructure development, heavy engineering, defence, shipbuilding, power, hydrocarbons, information technology, and financial services.
Written By Abhishek Das
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