A day after L&T shares declined over 6% in trade on Wednesday, March 4, Jefferies in its latest note has retained its buy rating on Larsen & Toubro, while trimming its target price to ₹4,500 per share from ₹4,715 earlier, citing near-term risks arising from the company’s exposure to projects in West Asia.
According to the brokerage, around 37 per cent of Larsen & Toubro’s order book is linked to West Asia, with Saudi Arabia contributing the majority share of the region’s exposure. The brokerage noted that the company’s strong presence in the region has historically supported order inflows and project execution.
However, Jefferies highlighted that any disruption to operations in the region could affect earnings visibility in the near term. The brokerage estimates that a one-month disruption in project execution could impact FY26 earnings per share by around 6–8 per cent.
Despite these near-term risks, Jefferies believes the long-term outlook for the company remains supported by its strong order book and project pipeline. The brokerage added that normalisation of conditions in West Asia could support recovery through stronger order growth and margin stability over the medium term.
Larsen & Toubro continues to maintain a diversified order book across infrastructure, energy and industrial segments, which provides earnings visibility despite temporary disruptions in key geographies.
Disclaimer: The views and investment tips expressed above are those of the brokerage and do not represent the views of this publication. This article is for informational purposes only and does not constitute investment advice.