The shares of a Large-cap company specializing in engineering, procurement, and construction (EPC) projects, hi-tech manufacturing, and technology services are in focus following Jefferies’ target with an upside potential of 28 percent from the previous day’s close.
With a market capitalisation of Rs. 5,38,789.16 crore in the day’s trade, the shares of Larsen & Toubro Ltd rose upto 0.62 percent, making a high of Rs. 3,930.85, compared to the previous close of Rs. 3,906.50.
What Happened
Larsen & Toubro Ltd. shares are in the spotlight after Global brokerage firm Jefferies maintained a “BUY” rating on the stock with a target price of Rs. 5,000. This target price implies an upside potential of around 27.8 percent from the previous close of Rs. 3,906.50.
Reason for the Target
Strong Order Flow From Middle East and Domestic Private Sector
Jefferies pointed out that the management still views the Middle East and domestic private sector as being instrumental in driving orders. The ongoing infrastructure investment, along with big projects and improvement in the private sector’s capital expenditure, could lead to an order pipeline in good shape.
Revenue Growth Despite West Asia Execution Delays
Jefferies has considered the assumption of 10%-12% revenue growth in FY27, taking into consideration the delays in execution due to the West Asia conflict. Jefferies anticipates a better performance in the second half, which can aid L&T to gain momentum on project execution.
Large Thermal BTG and Offshore HVDC Order Books
L&T is currently enjoying large order books in its BTG and offshore HVDC businesses. Jefferies anticipates that execution in these segments will get better in the near future, which will translate the company’s order book into revenues and provide visibility on its earnings front.
Improving Earnings Visibility
The diversified order book of the firm in infrastructure, energy, and overseas markets creates fairly good visibility of earnings. With improved execution and completion of big projects through their construction cycle, L&T may have better revenue conversion, which supports the favorable outlook of the brokerage firm and its target price of Rs. 5,000.
Potential Easing of Global Tensions
According to Jefferies, a decrease in geopolitical problems will be one of the positive factors that can have an impact on the share price performance of L&T. The reduction in geopolitical risk may lead to better project implementation in the international market, especially in the Middle East.
Financials & Others
Revenue from Operations increased by 6.69 percent YoY, from Rs. 63,679 crore in Q1 FY26 to Rs. 67,942 crore in Q1 FY27. It decreased by 17.91 percent QoQ, from Rs. 82,762 crore in Q4 FY26 to Rs. 67,942 crore in Q1 FY27.
Net Profit increased by 15.51 percent YoY, from Rs. 4,318 crore in Q1 FY26 to Rs. 4,988 crore in Q1 FY27. However, it decreased by 18.67 percent QoQ, from Rs. 6,133 crore in Q4 FY26 to Rs. 4,988 crore in Q1 FY27.
The company has a ROCE of 14.6% and ROE of 15.9%, reflecting its returns on capital and equity. It has also maintained a healthy dividend payout ratio of 33.1%, indicating consistent shareholder returns.
Larsen & Toubro Ltd (L&T) is a diversified engineering and infrastructure company engaged in EPC projects, construction, manufacturing, technology services, and other businesses. The company has a presence across infrastructure, energy, defence, heavy engineering, IT, and financial services, serving customers in India and international markets.
Order Book Overview
The order book of the company grew by 27 percent year over year to Rs. 7,790 billion as of June 30, 2026, from Rs. 6,128 billion as of June 30, 2025. This depicts an impressive rise in the pending projects of the company.
As of 30-Jun-26, the International Orders were Rs. 4,076 billion and constituted about 52.3 percent of the total order book, which was Rs. 7,790 billion on June 30, 2026. Thus, the international market constitutes a higher share in the overall order book.
The domestic orders amounted to Rs. 3,714 billion, accounting for almost 47.7 percent of the total order book. Although lower than international orders, the domestic segment still constitutes an important share of the order book.
The total order book value for FY27 Q1 was at Rs. 7,790 billion, out of which India’s share came to 48 percent. 8 percent of the share was from the USA and Europe, 37 percent was from the Middle East, and the remaining 8 percent was from the rest of the world (ROW).