Larsen & Toubro shares surged after a stronger-than-expected second quarter, with record order inflows and a robust order book offsetting Jefferies’ concerns over weaker engineering and construction margins.
Larsen & Toubro shares climbed sharply on Wednesday after the engineering group reported a stronger-than-expected second quarter, even as Jefferies trimmed its valuation target on concerns about margins. The stock rose to ₹3,894 on the National Stock Exchange, making it the day’s biggest gainer on both the Sensex and the Nifty during a weak broader market, and putting it on course for its largest one-day advance in more than six months.
According to the company’s results, consolidated net profit increased 33% year on year to ₹5,202 crore in the quarter ended September 30, compared with ₹3,926 crore a year earlier. Revenue from operations rose 16% to ₹78,750 crore from ₹67,984 crore, helped by faster execution across the Projects, Products and Manufacturing portfolio. EBITDA, a measure of operating profit before interest, tax, depreciation and amortisation, edged up to ₹6,845 crore from ₹6,806 crore.
International business remained a major contributor, with overseas revenue at ₹45,870 crore, or 58% of total sales, according to the company. L&T also reported record quarterly order inflow of ₹1,47,665 crore, up 28% from a year earlier, with wins across Hydrocarbon, CarbonLite Solutions, Public Spaces & Airports, and Power Transmission & Distribution. The company’s order book stood at ₹8,535 billion, reflecting continued strength in demand across its core businesses.
Jefferies kept a Buy rating on the stock but lowered its target price to ₹4,700 from ₹5,000, saying the quarter’s EBITDA came in about 5% below its forecast and that the engineering and construction margin of 7.2% was weaker than expected. Even so, the broker noted that first-half order flow was rising faster than L&T’s full-year guidance and said management had held to its FY27 margin estimate and revenue growth target of 10% to 12%. Jefferies added that L&T has already outperformed the Nifty by 2% to 6% year to date and over the past year, a trend it expects to continue on the back of the group’s strong order book and execution.
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