Jefferies has reiterated its buy rating on Larsen & Toubro with a target price of ₹4,715, following a strong Q3 performance driven by margin expansion in the engineering and construction (E&C) business.
The brokerage noted that Q3 EBITDA was 4% above expectations, led by E&C margins of 8.2%, up 60 basis points YoY, despite a 20% YoY increase in international E&C revenues and muted 2% growth in domestic revenues. This margin performance underscored L&T’s execution efficiency and cost control.
Order inflows rose 17% YoY, and management expressed confidence in exceeding its FY26E revenue growth guidance of 10% YoY. Jefferies highlighted that the company is set to unveil a five-year strategic plan alongside its annual results in May 2026, which could act as a key trigger for the stock.
Potential discussion points include semiconductor investments and the possibility of Hyderabad Metro moving off L&T’s books, both of which could improve capital allocation clarity and return metrics.
Jefferies remains positive on L&T’s long-term prospects, citing strong execution, robust order momentum and multiple strategic catalysts ahead.
Disclaimer: The views and recommendations above are those of Jefferies. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
