The shares of the large-cap company, which specialises in engineering, procurement, and construction (EPC) projects, heavy manufacturing, and technology services, are in focus following the target set by CITI with an upside potential of upto 18 percent from the day’s low price.
With a market capitalisation of Rs.5,45,269.49 crore in the day’s trade, the shares of Larsen & Toubro Ltd declined upto 0.90 percent, making a low of Rs. 3,953.95, compared to the previous close of Rs. 3,990.00.
What Happened
Larsen & Toubro Ltd shares are in the spotlight after a global brokerage firm, Citi, maintained a “BUY” rating on the stock and set a target price of Rs. 4650. The target implies an upside potential of around 17.6 percent from the day’s low price of Rs. 3953.95.
Robust Order Inflow Momentum
The robust order inflow momentum of L&T has helped increase revenue visibility for the medium term. Recent wins in various business segments suggest continuous spending by customers, and a good order pipeline helps the firm get a good foundation for future revenue generation.
Strong Order Wins Across Key Segments
Recent large bookings in the hydrocarbon segment, thermal power, energy storage, and energy transportation have provided an improved order book scenario for L&T. This diversification ensures reduced dependence on any one of these businesses, thereby giving visibility on revenues moving forward.
Execution Recovery Provides Upside
L&T continues to be well-positioned to recover through execution as its large order book starts delivering on revenues. Good execution may help to deliver good revenue performance and operations performance, and even improved project execution could be a source of upside for earnings estimates.
Improving Medium-Term Revenue Visibility
The mix of robust order inflows and diversified project pipeline ensures that L&T has good visibility of revenues for the near term. Larger projects within infrastructure, energy, and industrial verticals can help ensure growth in execution, even with the vagaries in each of the business verticals.
Reasonable Valuations
Though L&T has a robust order book and diversified business footprint, in Citigroup’s opinion, its valuation is still justified. According to the broker, the current valuation appropriately accounts for the near-term expectations but provides upside for earnings growth and execution-driven revaluation, justifying the target price of Rs. 4,650.
Financials & Others
Revenue from Operations increased by 6.7 percent YoY, from Rs. 63,679 crore in Q1 FY26 to Rs. 67,942 crore in Q1 FY27. It decreased by 17.9 percent QoQ, from Rs. 82,762 crore in Q4 FY26 to Rs. 67,942 crore in Q1 FY27.
The company’s Net Profit increased by 15.5 percent YoY, from Rs. 4,318 crore in Q1 FY26 to Rs. 4,988 crore in Q1 FY27. It decreased by 18.7 percent QoQ, from Rs. 6,133 crore in Q4 FY26 to Rs. 4,988 crore in Q1 FY27.
It maintains a healthy ROCE of 14.6% and ROE of 15.9%, reflecting efficient capital utilisation and solid shareholder returns. It also maintains a healthy dividend payout of 33.1%, indicating consistent value distribution to shareholders.
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 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).
Larsen & Toubro Ltd is one of the top multinationals in India dealing in EPC projects, hi-tech manufacturing, and services. It has operations in over 50 nations. It is a well-known name in infrastructure, energy, defence, manufacturing, and technology.
It has more than eight decades of experience and an integrated capability base ranging from “design to delivery.” The diversification of its business portfolio along with execution capabilities has helped L&T retain its leadership position in many key areas of the economy.