L&T shares get a downgrade from Nomura, HSBC cuts target after Q4 results

Brokerage firm Nomura has downgraded its rating on Larsen & Toubro in its latest note on Wednesday, May 6, after the company reported results for the March quarter and also shared its guidance for financial year 2027.

Nomura has downgraded L&T to "neutral" from its earlier rating of "buy" and also trimmed its price target to ₹3,940 from ₹4,510 earlier. The revised price target implies a downside potential of 3.3% from current levels.

The brokerage has cut its financial year 2027 and 2028 core earnings per share (EPS) estimates by 8% to factor in:

• Lower-than-expected financial year 2027 sales / EBITDA margin guidance of 10% to 12%, which is flat from last year.


• Execution disruptions due to the West Asia crisis


• and Cost headwinds, particularly in the case of international operations

Nomura also added that L&T is trading at 32 times and 26 times its estimated financial year 2027 and 2028 core earnings, implying lesser comfort on valuations due to near-term uncertainties and limited visibility on improving Return on Equity (RoE).

Along with Nomura, HSBC has also cut its price target on Nomura to ₹3,800 along with its "hold" rating, stating that large growth in order inflow on a high base is tough in the current geopolitical environment and that new investments made can be a drag on its RoE.

CLSA has an "outperform" rating on L&T with a price target of ₹4,842. It stated that L&T's $82 billion order backlog, which grew 28% from last year, appears "solid" in the current environment.

Other than that, the fall in working capital by 690 basis points was another positive from L&T's results, as per CLSA, who went on to add that the 10% to 12% rise in new orders and execution with flat margins is contingent on the Strait of Hormuz reopening from the second quarter of financial year 2027.

34 analysts have coverage on L&T, of which 27 have a "buy" rating, six have a "hold" rating and one has a "sell" recommendation.

Shares of L&T ended 0.6% lower on Tuesday at ₹4,075 before the results announcement. The stock is up 10% in the last one month.

The story will be updated with more analyst commentary.