L&T’s growth story intact, say analysts after Q2 show; buy, sell, or hold shares? | Markets News
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Engineering and construction major Larsen & Toubro (L&T) is riding on a healthy order book and a robust project pipeline, keeping analysts upbeat even as quarterly results showed some execution hiccups. Nuvama Institutional Equities and Motilal Oswal Financial Services (MOFSL) have retained their Buy ratings on L&T stock, signaling confidence in the company’s medium-term growth prospects.
Nuvama sees strong growth prospects
Subhadip Mitra, Srishti Gandhi, Vikram Datwani, and Divyam Sureka—research analysts at Nuvama—said they remain optimistic on L&T, citing a consolidated order book at 3.6x FY25 sales (₹6.67 trillion) and a ₹10.4 trillion pipeline for H2FY26, up 29 per cent Y-o-Y, largely driven by infra and hydrocarbon projects. They have also revised FY27E/28E EPS estimates up by 0.4 per cent and 3 per cent, respectively, and raised the target price to ₹4,680 from ₹4,200, valuing the core business at 25x FY28E EPS. The revised target implies an upside of nearly 18.43 per cent from the stock’s last traded price of ₹3,955 on the BSE on October 29, 2025.
Nuvama analysts said core operating margins have bottomed out at around 8.2 per cent and are expected to remain in the 8.3–8.5 per cent range alongside 15 per cent sales growth through FY27/28E, as more projects reach margin milestones. Management reiterated FY26 guidance of 15 per cent revenue growth and 8.5 per cent core operating margins, highlighting that other income growth is likely to exceed the 10 per cent target, with H1 inflows up 48 per cent Y-o-Y and an additional $4.5 billion under L1.
MOFSL maintains confidence in L&T growth
MOFSL analysts have also retained a Buy rating on L&T shares with a revised target of ₹4,500, up from ₹4,300, reflecting revised valuations of subsidiaries.
According to MOFSL, the stock is trading at 30x/25x/21x P/E on FY26/27/28E earnings for the core E&C business. “We tweak our estimates to factor in 1H performance for the core business as well as the IT subsidiaries. We now expect core E&C revenue/Ebitda/PAT to grow at a CAGR of 16 per cent/18 per cent/22 per cent,” the brokerage said.
MOFSL valued L&T’s core business at 28x P/E two-year forward earnings, applying a 25 per cent holding company discount for subsidiaries.
The brokerage, however, cautioned that slower order inflows, delays in completing mega and ultra-mega projects, a sharp rise in commodity prices, increased working capital, and heightened competition could pose downside risks to their estimates.
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