Motilal Oswal has maintained a buy rating on L&T, while lowering its target price to ₹4,400 per share from ₹4,600 earlier, highlighting near-term risks arising from the company’s significant exposure to West Asia projects.
The brokerage noted that around 39–40 per cent of Larsen & Toubro’s order book is linked to West Asia, which could pose near-term risks to execution and revenue visibility if disruptions occur in the region.
Motilal Oswal also flagged concerns around the company’s technology services subsidiary, stating that artificial intelligence-led disruption could put pressure on valuations for IT services businesses, which may influence the overall valuation framework for the group.
As part of its revised estimates, the brokerage has cut the valuation multiple for the core engineering and construction business to 25 times earnings from 27 times earlier.
Motilal Oswal added that near-term execution risks and margin pressures remain, particularly if geopolitical developments or project delays impact activity in key international markets.
Despite these concerns, the brokerage continues to maintain a constructive stance on Larsen & Toubro given its diversified order book, strong project pipeline and leadership position in India’s infrastructure and engineering sector.
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.