Brokerage firm CLSA has reiterated its outperform rating on Larsen & Toubro (L&T) and raised the target price to ₹4,176, citing strong performance across key business metrics in Q1FY26. The stock closed at ₹3,488.00.
L&T’s first-quarter performance surprised positively in three of its four guidance pillars: order inflows, execution, and working capital, while the core E&C margin remained flat. The standout highlight was a 33% year-on-year rise in order inflow, driven by a massive $2.5 billion power equipment order—its second-largest ever—amid India’s push for 80GW of new fossil-based capacity.
CLSA also noted a big beat on working capital metrics and strong core execution growth of 18% YoY. Furthermore, the management has guided for an ambitious US$170 billion prospects pipeline for FY26 YTD, reflecting a 64% growth, though CLSA cautioned this could be optimistic given the current environment.
Importantly, CLSA highlighted a 230 basis point improvement in return on equity (ROE), indicating progress in L&T’s ongoing efforts to boost capital efficiency. The brokerage believes the company is well-positioned to deliver on its FY26 growth guidance, supported by a robust order book and execution strength.
Disclaimer: The views and investment recommendations expressed in this article are those of CLSA and do not represent the views of this publication. Investors are advised to consult their financial advisors before making any investment decisions.
