L&T shares rise over 4% as analysts find risk-reward ‘favourable’ post Q2

Shares of Larsen & Toubro Ltd. are among the top gainers on the Nifty 50 index after the company’s September quarter results, which were reported after market hours on Wednesday.

For the quarter, L&T’s overall order book stood at ₹5.1 lakh crore, with the September quarter order inflow of nearly ₹81,000 crore.

Brokerage firm Bernstein wrote that this was another quarter of strong execution by L&T but the decline in order inflow is not surprising considering the high base in the base quarter.

Execution and working capital management makes up for margins and order inflow for L&T, Bernstein wrote in its note.

The brokerage has an “outperform” rating on the stock with a price target of ₹3,891.

Nomura said that L&T offers a favourable ‘risk-reward’, while maintaining its “buy” rating on the stock and a price target of ₹4,100.

After the September quarter surprise, Nomura expects L&T to achieve its order inflow guidance. The brokerage also called L&T retaining its core margin guidance at 8.25% “conservative” and expects upsides to those levels.

CLSA’s “outperform” rating on L&T comes with a price target of ₹4,151. The brokerage said that the surprise second quarter is reflective of the strength of L&T’s business model.

It wrote in its note that the infrastructure segment margin expansion at 60 basis points should surprise the market.

Out of the 35 analysts that have coverage on L&T, 30 of them still have a “buy” rating on the stock, four of them say “hold”, while one has a “sell” recommendation on the stock.

BNP Paribas has the highest price target on the stock at ₹4,421, while Ambit’s “sell” rating comes with a price target of ₹2,946.

Shares of L&T are currently trading 4.6% higher at ₹3,566. The stock has recovered its losses and has yet again turned positive for 2024.