JM Financial has maintained its “buy” rating on L&T but has cut its price target to ₹4,380 per share from ₹4,655 apiece. This still implies 17.5% upside potential from its previous close.
The brokerage said the West Asia crisis impacts L&T’s near-term prospects given its significant exposure to the region. It can also be impacted by a possible shortage of key raw materials, even in India, the brokerage note said.
However, the brokerage said that the long-term outlook for the business remains robust with no news of project cancellations or payment delays.
The reconstruction and investment into infrastructure resilience can drive a surge in inflows for L&T going forward, JM Financial added.
The brokerage said that after a successful Project Lakshya in financial year 2026, the goals to be set for financial year 2031 assume significance.
JM Financial expects L&T to increase thrust in areas such as defence (precision engineering), thermal power EPC (energy) and realty. The brokerage also expects focus in new-age areas such as semiconductor design and potentially data centers.
Shares of L&T are trading at 16.9 times and 13.8 times its FY27 and FY28 estimated earnings before interest, tax, depreciation and amortization (EBITFA), which is attractive from a long-term perspective, according to JM Financial.
As much as 49% of L&T’s consolidated order book was from its international business and of this, over 80% was from Saudi Arabia, UAE and the Gulf region.
Two weeks ago, L&T said it had 100 sites operating in the Gulf region in all segments and 95% of them were business as usual, while 5% of the sites were suspended or disrupted in West Asia.
Of the 34 analysts who have coverage on L&T, 29 have a ‘buy’ rating, four have a ‘hold’ rating and one has a ‘sell’ rating.
The stock entered bear market territory last week, but has recovered 2% in the past week. L&T shares were trading 0.3% lower at ₹3,716.5 apiece at 12.20 pm. The stock has declined 10.4% this year, so far.
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