HSBC has maintained its ‘Hold’ rating on Larsen & Toubro (L&T) with a target price of ₹3,600, highlighting a promising outlook for the company in CY25 after a dip in CY24. The brokerage noted that L&T’s pipeline of opportunities in the Middle East continues to surprise positively, especially given the company’s ability to scale up this business at a significant pace.
While CY24 may see a relative slowdown due to a high base and some normalization in order flows, the company’s robust start to CY25 suggests strong growth momentum ahead, HSBC said. L&T’s global diversification and ability to execute large-scale engineering, procurement, and construction (EPC) contracts in international markets — especially in the Middle East — is seen as a critical driver of future growth.
The stock currently trades at 21x FY27E P/E, which HSBC believes fairly reflects its near-term earnings trajectory and risk-reward profile. Investors will likely remain focused on L&T’s execution performance, margin guidance, and order inflow trajectory, particularly from global markets where large infra and energy projects are seeing revival post-COVID and amid higher oil prices.
L&T continues to be a bellwether for India’s infrastructure and capital goods sectors, with exposure across defense, power, transport, hydrocarbons, and water. The company has also been accelerating its digital and green energy businesses, which could provide further optionality in the medium term.
