Larsen & Tata Toubro Stock Surges as Q1 Profit Smashes Estimates; Order Pipeline Fuels Analyst Bull Case
Shares of Larsen & Tata Toubro Ltd (L&T) climbed over 3 percent in morning trade, reaching Rs 3,957.6. The jump made it the top gainer on the Nifty 50. This rally follows the infrastructure giant's release of stronger-than-expected fiscal first quarter earnings and confirmation of its FY27 growth guidance.The stock, which had previously declined 7.5 percent this year, maintains a market capitalization of around Rs 4.55 lakh crore. The wider market was also buoyant, with the Sensex rising 684 points to 77,450 and Nifty 50 gaining 195 points to 24,180 at one point in time.
Financial Performance Review of L&T’s First Quarter
L&T reported a significant 14 percent year-on-year rise in consolidated net profit, reaching Rs 4,123 crore. This figure successfully beat the CNBC-TV18 poll estimate of Rs 3,490 crore. Revenue also performed strongly, increasing by 6.7 percent to Rs 67,942 crore, which was ahead of market estimates.However, the company saw a decline in EBITDA, which stood at Rs 6,116 crore and represented a 3.2 percent decrease. Consequently, the EBITDA margin narrowed to 9 percent from 9.9 percent compared to the previous year. Despite this operational nuance, the consolidated order book stood robustly at Rs 7.79 lakh crore at the close of June, marking a 5 percent rise since March.
Order Book Strength and Analyst Outlooks
Both Jefferies and CLSA maintained positive ratings on the stock despite mixed execution reports for the quarter. Jefferies retained its Buy rating, setting a target price of Rs 5,000, implying an upside exceeding 30 percent. The brokerage highlighted that order inflows grew 14 percent year-on-year, surpassing the company's FY27 guidance of 10-12 percent growth.CLSA maintained an Outperform rating with a target price of Rs 4,842. This firm noted that L&T beat expectations on key indicators including order inflows, working capital, and recurring E&C margins. CLSA pointed to the extensive Rs 7.79 lakh crore order backlog as a major positive for the company.
Both brokerage houses cited execution challenges within engineering and construction (E&C) as a softer point in the quarter. Jefferies suggested that improving earnings visibility could allow the stock to return to pre-conflict levels if geopolitical tensions ease. CLSA also noted the importance of L&T's long-term focus on areas such as green technologies, artificial intelligence, and specialty chemicals.
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