Shares of engineering and infrastructure major Larsen & Toubro climbed nearly 4% on July 30, as investors cheered for the company's better-than-expected earnings for the June quarter. The company also maintained its full-year guidance on revenue, operating margins and order inflows, which brokerages see as a show of confidence amid a growing project pipeline.
L&T’s consolidated order inflow surged to ₹94,500 crore in Q1 FY26, much ahead of street estimates. The management also reaffirmed its guidance of 10% growth in order inflow for the year, which many brokerages now believe could be exceeded, helped by strong traction in the West Asia and domestic execution.
Buoyed by the optimism, Morgan Stanley retained its “overweight” stance on the stock, with a target price of ₹4,090. Motilal Oswal echoed a similar view, maintaining a “buy” rating with a price target of ₹4,200, implying a potential upside of over 20% from current levels.
Hopping on the trend, Jefferies raised its target price to ₹4,230 from ₹3,965 earlier, citing a robust order book and improved visibility in the hydrocarbon segment. Not just that, the brokerage also flagged L&T’s revenue guidance of 15% year-on-year growth as conservative, and believes margin expansion remains a possibility as the mix shifts toward higher-margin businesses.
CLSA, which has an “outperform” rating on the stock, also lifted its target to ₹4,176. The firm noted that Q1 results beat expectations on three of four key metrics, with the benefit of margin expansion yet to be fully realised. The brokerage pointed towards the meaningful improvement in working capital and execution efficiency as key positives.
Meanwhile, JM Financial touted L&T’s Q1 performance as a 'strong positive surprise' especially on the order inflow front, which came in substantially above their expectations. The brokerage reiterated L&T as its top infrastructure pick, assigning a price target of ₹4,313. It also pointed to a multi-year recovery in West Asia tendering activity and ongoing land monetisation efforts as potential near-term catalysts for the infra major.
Nuvama Institutional Equities, while factoring in a steady core operating margin of 8.3% through FY27, sees upside potential if project execution picks up pace and margin milestones are achieved in the second half of FY26.
