Larsen & Toubro (L&T)
Stock Snapshot
Price Performance
Vista Outlook
View Technicals Analysis →Basis of our Recommendation
Larsen & Toubro (L&T) is navigating a complex landscape characterized by a robust order book and strategic pivots into high-growth sectors such as AI infrastructure and renewable energy. Management's optimistic outlook, supported by a record order backlog of INR 7.8 trillion and a substantial INR 15 trillion opportunity pipeline, underscores the company's potential for sustained revenue growth despite near-term execution challenges due to geopolitical tensions in the Middle East. The recent acquisition of a significant AI infrastructure project positions L&T as a key player in the evolving tech landscape, enhancing its competitive position. Vista's forecast anticipates stable margins and a revenue growth rate of 10-12% for FY27, reflecting confidence in L&T's ability to recover from temporary setbacks. However, execution risks and supply chain disruptions remain watchpoints. The favorable macro environment, bolstered by government capex and private sector investments, further supports L&T's growth trajectory. Over the next 12-24 months, L&T's focus on high-margin projects and disciplined capital allocation will be critical in navigating challenges and capitalizing on emerging opportunities
Why We Like This Stock
- Record order backlog of INR 7.8 trillion and a healthy INR 15 trillion opportunity pipeline support sustained revenue growth
- Strategic pivot into AI infrastructure and renewable energy enhances competitive positioning and long-term growth potential
- Management's disciplined capital allocation and focus on high-margin projects are expected to stabilize margins and improve profitability
Things To Watch Out For
- Execution challenges due to geopolitical tensions in the Middle East may impact project timelines and margins
- Supply chain disruptions and cost escalations could hinder short-term performance and profitability
- Potential project deferments and execution risks in new ventures like green hydrogen may temper growth expectations
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 221,113 | 255,734 | 285,874 | 287,071 | 330,207 |
| Profit Before Tax (Cr.) | 19,156 | 23,877 | 27,698 | 29,432 | 32,814 |
| PBT Margin | 8.7% | 9.3% | 968.9% | 10.3% | 9.9% |
| Net Profit (Cr.) | 14,346 | 17,685 | 20,287 | 21,852 | 20,916 |
| Earnings Per Share | 86.2 | 109.4 | 126.6 | 136.4 | 152.0 |
Analyst Recommendations
| Broker | Recommendation | Target Price | Date |
|---|---|---|---|
| Bernstein | ▲ Buy | 4,637 | 06-May-2026 |
| CLSA | ▲ Outperform | 4,842 | 29-Jul-2026 |
| Citigroup | ▲ Buy | 4,650 | 29-Jul-2026 |
| Elara Capital | ► Accumulate | 4,251 | 29-Jul-2026 |
| Goldman Sachs | ▲ Buy | 4,370 | 29-Jul-2026 |
| HDFC Securities | ▲ Buy | 4,529 | 06-May-2026 |
| HSBC | ► Hold | 3,800 | 06-May-2026 |
| ICICI Securities | ▲ Buy | 5,000 | 29-Jul-2026 |
| Investec | ▲ Buy | 4,440 | 15-May-2026 |
| JMFinancials | ▲ Buy | 4,640 | 29-Jul-2026 |
| JPMorgan | ▲ Buy | 5,060 | 16-Jun-2026 |
| Jeffries | ▲ Buy | 5,000 | 29-Jul-2026 |
| LKP Securities | ▲ Buy | 4,570 | 30-Jul-2026 |
| Moneycontrol | ► Equalweight | nan | 29-Jul-2026 |
| Morgan Stanley | ▼ Underweight | 4,968 | 06-May-2026 |
| Motilal Oswal | ▲ Buy | 4,550 | 29-Jul-2026 |
| Nomura | ▲ Buy | 4,200 | 01-Jun-2026 |
| Prabhudas Liladhar | ▲ Buy | 4,425 | 29-Jul-2026 |
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.