Stock Snapshot
Price Performance
Recommendation Rationale
Strong growth outlook supported by robust order inflows and strategic initiatives, tempered by manageable margin pressures.
Basis of our Recommendation
Larsen & Toubro (L&T) is positioned for robust growth driven by strong order inflows, a revival in private capex, and strategic partnerships, particularly in the energy sector. The company's ambitious Lakshya31 plan aims for significant revenue growth, although it faces potential margin pressures and geopolitical risks that could impact near-term earnings. Overall, the outlook remains positive with a focus on operational efficiency and market expansion.
Why We Like This Stock
- Strong order inflows and private capex revival indicate robust demand
- Strategic partnerships, such as with Adani for nuclear projects, enhance growth potential
- Ambitious plans for real estate development signal confidence in market demand
Things To Watch Out For
- Potential margin pressures due to new ventures and geopolitical uncertainties
- Execution challenges could impact revenue in the near term
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 221,113 | 255,734 | 285,874 | 319,184 | 365,873 |
| Profit Before Tax (Cr.) | 19,156 | 23,877 | 27,698 | 29,692 | 34,524 |
| PBT Margin | 8.7% | 9.3% | 9.7% | 9.3% | 9.4% |
| Net Profit (Cr.) | 14,346 | 17,685 | 20,287 | 18,926 | 22,006 |
| EPS | 86.2 | 109.4 | 126.6 | 137.6 | 160.0 |
Company Overview
Show Company Profile
Larsen & Toubro Limited engages in engineering, procurement, and construction projects (EPC) in India and internationally. The company operates through four segments: Infrastructure Projects, Energy Projects, Hi-Tech Manufacturing, and Others. The Infrastructure Projects segment is involved in the engineering and construction of building and factories, transportation infrastructure, heavy civil infrastructure, power transmission & distribution, renewables, water and effluent treatment, and minerals and metals. The Energy Projects segment provides EPC solutions in clean energy space, oil & gas, refineries, petrochemicals & offshore wind energy sectors, from front-end design through detailed engineering, modular fabrication, procurement, project management, construction, installation and commissioning; CarbonLite solutions for power generation plants including power generation equipment with associated systems; and carbon capture utilization and utility packages. The Hi-Tech Manufacturing segment designs, manufactures/constructs, supplies, and revamps/retrofits custom designed engineered critical equipment and systems for the process plants, nuclear energy, and green hydrogen sectors; marine and land platforms, related equipment and systems, and aerospace products and systems; precision and electronics products and systems; and electrolysers. The other segment engages in realty; smart infrastructure and communication projects; construction equipment; and industrial product design development, including marketing and servicing of construction equipment, mining machinery and parts thereof, manufacture and sale of rubber processing machinery, and ecommerce/digital platforms and data centers. It has a strategic partnership with General Atomics Aeronautical Systems, Inc. to manufacture Medium Altitude Long Endurance (MALE) Remotely Piloted Aircraft Systems (RPAS) in India, for the Indian armed forces. The company was founded in 1938 and is headquartered in Mumbai, India.