Macquarie has reiterated its Outperform rating on Larsen & Toubro (L&T) with a target price of ₹4,210. Management commentary suggests robust growth prospects, particularly in the Middle East, where engineering and construction (E&C) opportunities remain strong. The company has strategically deployed senior personnel in the region to capitalize on these opportunities.
On the domestic front, L&T remains selective with state capex projects, while central government capex is expected to gain momentum in H2FY25. The private sector capex cycle, though different from previous upcycles, also presents growth potential. Additionally, L&T’s new initiatives, such as scaling up semi-conductor projects and green hydrogen offerings, are anticipated to deliver sizeable medium-term growth.
Macquarie remains optimistic about L&T’s ability to secure large-scale government projects, which currently contribute 70-75% of order inflows. This diversified growth strategy underscores L&T’s resilience and positions it as a key player in India’s infrastructure development story.
