Nomura has maintained its buy rating on Larsen & Toubro (L&T) with a target price of ₹4,510, even as execution challenges led to a miss on quarterly sales expectations.
The brokerage highlighted that ordering momentum remains robust, with core order inflows growing 18% year-on-year, reinforcing visibility on L&T’s long-term growth pipeline. However, core sales grew 10% YoY, coming in 9% below Nomura’s estimate, primarily due to weaker-than-expected execution in the infrastructure segment.
Nomura has cut its FY27–28 EBITDA estimates by 1–3%, factoring in weaker margins in the energy segment, though it noted that core EBITDA margins still beat expectations, supported by cost discipline. The company’s net working capital position also improved further, strengthening balance sheet comfort.
Despite near-term execution headwinds, Nomura expects core EBITDA to grow at a CAGR of 23% over FY26–28, driven by sustained order inflows, margin resilience and gradual improvement in execution intensity.
The brokerage remains constructive on L&T’s medium-term outlook, supported by its diversified order book and leadership position across infrastructure and industrial segments.
Disclaimer: The views and recommendations above are those of Nomura. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
