Larsen & Toubro (L&T) shares surged by nearly 5 percent in early trading on Friday after the company reported a 14 percent increase in consolidated profit after tax to ₹3,359 crore for the December quarter. Additionally, revenue from operations saw a significant uptick of 17 percent to ₹64,668 crore during the same period.
Various brokerages expressed optimism about L&T’s performance, highlighting the strong order book and execution. Motilal Oswal, a domestic brokerage, remained positive on the company’s outlook and anticipated further benefits from new initiatives in electrolyzers, semiconductors, data centers, and real estate in the coming years. On the other hand, JM Financial analysts noted that while L&T had strong order inflows, weak margins impacted the profit after tax, leading them to retain a buy rating with a revised target price of ₹4,015.
Although there were concerns about margin improvement falling short of expectations, Motilal Oswal expects progress in the near future as certain large projects in the Middle East advance to the revenue and margin recognition stage. Despite trimming estimates for FY25/26/27 due to slightly lower margins in the core engineering and construction segment, Motilal maintained a buy rating with an unchanged target price of ₹4,300. Morgan Stanley also reiterated an overweight rating with a target price of ₹4,278.
International brokerages CLSA and Bernstein provided outperform ratings with target prices of ₹4,151 and ₹3,922, respectively. Nuvama Institutional Equities retained a buy rating at an unchanged target price of ₹4,000, citing strong order book and execution despite the possibility of a margin uptick being further down the line.
L&T’s stock was among the top gainers in the Nifty 50 pack, trading at ₹3,567.05 on the NSE, up by 4.27 percent at 10:38 am, after reaching a high of ₹3,590 in early trading. The company’s Q4FY25 pipeline was reported to be healthy at INR5.51tn, encompassing infrastructure, hydrocarbons, and heavy engineering projects.
Overall, brokerages remained upbeat on L&T’s performance, emphasizing the company’s robust order inflow and execution capabilities, despite some concerns about margins and potential downside risks in the future.
