L&T shares fall 3% after Q4 profit dips 3%, margins contract
Brokerages split on Lakshya 2031 plan, targets cut by Nomura, HSBC
Revenue rises 11% but execution, West Asia risks weigh on outlook
Shares of Larsen & Toubro declined over 3% on Wednesday after the company reported mixed Q4 FY26 earnings and outlined its long-term "Lakshya 2031" strategy, drawing a divided response from brokerages.
The stock fell as much as 3.3% to ₹3,921.4, extending losses after slipping 1.1% in the previous session post-results. Despite the recent correction, L&T shares remain up 17.8% over the past year, outperforming the Nifty 50, which has declined 0.7% during the same period.
1 May 2026
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L&T reported a 3% year-on-year decline in consolidated net profit to ₹5,326 crore for Q4 FY26, while revenue rose 11% to ₹82,762 crore. EBITDA increased 5% to ₹8,610 crore, though margins narrowed to 10.4% from 11% a year ago.
The company attributed the decline in reported profit to an exceptional gain of ₹475 crore in the year-ago quarter. On a recurring basis, profit rose 5% to ₹5,289 crore.
Brokerages Remain Divided
Nomura downgraded the stock to 'Neutral' and cut its target price to ₹3,940, citing subdued operating performance and a less optimistic outlook on FY27 order inflows. The brokerage also termed the Lakshya 2031 guidance underwhelming and reduced its earnings estimates for FY27 and FY28 by 8%.
HSBC retained a 'Hold' rating but lowered its target price to ₹3,800. While it noted strong order inflows and revenue, it flagged concerns over sustaining growth on a high base and warned that planned investments could weigh on return ratios.
In contrast, CLSA maintained an 'Outperform' rating with a target price of ₹4,842. It highlighted strong new orders and improved working capital as positives, though it acknowledged that execution and margins fell short due to weakness in West Asia and domestic infrastructure segments.
What Is Lakshya 2031?
Lakshya 2031 is L&T Finance's long-term strategic roadmap to transform itself into a risk-first, tech-first, AI-driven retail financier. The plan signals a shift toward deep integration of technology across lending, underwriting, collections and customer engagement.
Built on a granular, bottom-up approach and peer benchmarking, the strategy aims to position the company as a leading AI-enabled BFSI player by boosting innovation, strengthening portfolio resilience and improving operational efficiency.
Lakshya focuses on creating a diversified, cycle-resilient loan book with a balanced mix of secured and unsecured lending, while leveraging AI for cross-selling and productivity gains.
The company has also set key financial targets, including loan book growth of over 20%, credit cost below 2%, RoA of 3%–3.2% and RoE of 16%–18%, reflecting a calibrated balance between growth and profitability.
CLSA noted that L&T's FY27 guidance of 10–12% growth in new orders and execution, along with flat margins, depends on external factors such as the reopening of the Strait of Hormuz and stabilisation in West Asia from the second quarter.
