L&T shares gain over 3% on optimism of surpassing order inflow guidance; Check price targets

Shares of engineering and infrastructure conglomerate Larsen & Toubro Ltd

. (L&T) gained over 3% in early trading on Thursday, January 29, after the management maintained its full-year guidance across parameters, but also said that it will exceed its order inflow growth guidance of 10% for the full year.

Besides this, the management maintained its revenue growth guidance of 15% and the core margin guidance of 8.5% for the full year. Core margins at the end of the December quarter stood at 8.1%, an improvement of 40 basis points from last year.

L&T's net profit during the quarter was impacted due to a one-time labour code impact of ₹1,344 crore. Adjusted for that, the profit figure of ₹4,380 crore was higher than last year's figure.

For the quarter, L&T's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter grew by 18.6% from last year to ₹7,416 crore, marginally higher than the CNBC-TV18 poll of ₹7,329 crore.

However, concerns continue for L&T across some business verticals. Execution challenges in the domestic water projects led to the company missing its revenue estimates for the quarter. Challenges have led to the company deliberately delaying execution in the water business.

Margins for the Hydrocarbon business were also subdued, mostly due to cost overruns in competitively priced projects.

Brokerage firm Nomura has maintained its "buy" rating on the stock with a price target of ₹4,510 stating that although ordering remained robust, execution missed expectations.

As a result, Nomura cut its financial year 2027-2028 estimates for L&T's Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) by 1% to 3% to factor in the weak margins in the energy segment.

Nomura expects L&T's core EBITDA to grow at a Compounded Annual Growth Rate (CAGR) of 23% over financial year 2026-2028.

Jefferies also maintained its "buy" rating on L&T with a price target of ₹4,715. The brokerage stated that L&T will unveil its five-year plan with annual results in May 2026, including possible discussions on semiconductor investments, Hyderabad Metro moving off the books, which could be positive triggers for the stock.

On the flip side, HSBC expects L&T's fourth quarter to be weak on order inflows, and it also remains skeptical on the capex uptick in the Middle East for projects. Hence, it retained its "hold" rating on the stock with a price target of ₹3,900.

34 analysts have coverage on Larsen & Toubro, of which 28 have a "buy" rating, four say "hold" and two have a "sell" rating.

Shares of Larsen & Toubro are trading 3.1% higher in early Thursday trading at ₹3,911.2. The stock is up 14% over the last 12 months.