Goldman Sachs has upgraded Larsen & Toubro (L&T) to a ‘Buy’ rating and raised its target price to ₹5,000 from earlier levels, implying an upside of nearly 25% from the current market price of ₹4,003. The brokerage said the upgrade is driven by improving long-term growth visibility, supported by L&T’s expanding opportunities in defence, green hydrogen and nuclear power.
In its note, Goldman Sachs highlighted that L&T is well positioned to capitalise on emerging structural themes, with these three segments alone offering a combined total addressable market (TAM) of around ₹1.4 trillion (US$16 billion) in FY26E. The brokerage expects this opportunity set to expand sharply to nearly ₹3.4 trillion (US$38 billion) by FY35E, providing a strong multi-year growth runway.
Goldman Sachs also pointed to L&T’s healthy order backlog and improving confidence in a domestic capital expenditure recovery across select sectors. The brokerage believes that the company’s diversified project portfolio, strong execution capabilities and exposure to high-growth segments place it in a favourable position as private and public sector investments pick up.
On the financial front, the brokerage expects L&T to deliver low double-digit revenue compounding and mid-teens growth in profit after tax over the next five years, supported by margin stability, operating leverage and a better mix of high-value projects.
According to Goldman Sachs, the improved visibility on long-term earnings growth and the expanding opportunity landscape in strategic sectors underpin its decision to upgrade the stock and raise the target price.
Disclaimer: This article is based on a brokerage report by Goldman Sachs. The views expressed are those of the brokerage and are for informational purposes only. This is not investment advice or a recommendation to buy or sell any stock.