L&T Shares Slide 4% After Q4 Profit Dip. Why Jefferies, Goldman Sachs Are Still Bullish

Why It Matters

The results underscore L&T’s resilience amid geopolitical headwinds and signal strong order‑inflow momentum that could sustain India’s infrastructure expansion and attract global investors.

Key Takeaways

• Q4 net profit fell 3% to ₹5,326 crore (~$641 M)
• Revenue rose 11% to ₹82,762 crore (~$10 B)
• Order book hit record ₹7,40,327 crore (~$89 B), 28% YoY growth
• Jefferies, Goldman Sachs keep buy ratings, expect 10‑12% order growth

Pulse Analysis

Larsen & Toubro (L&T) remains a bellwether for India’s engineering and construction sector, and its latest quarterly numbers illustrate a nuanced picture. While net profit slipped to roughly $641 million, the company’s top line surged to about $10 billion, reflecting robust demand for large‑scale infrastructure projects both at home and abroad. The 5% rise in EBITDA to $1.04 billion signals that core operating efficiencies are holding up despite cost pressures from legacy projects and the lingering fallout of the US‑Iran‑Israel conflict.

A deeper dive reveals that L&T’s order book has reached an unprecedented ₹7,40,327 crore, equivalent to roughly $89 billion, with international orders now accounting for more than half of the pipeline. This diversification cushions the firm against regional volatility and aligns with its "Lakshya 2031" strategy, which earmarks a $2 billion spend on data‑centre, electronics and semiconductor capabilities. Such forward‑looking investments position L&T to capture emerging opportunities in defence, green hydrogen and digital infrastructure, sectors that are poised for accelerated growth as India ramps up its manufacturing and clean‑energy ambitions.

Sell‑side houses remain optimistic. Jefferies lifted its target price to ₹4,885, implying about 20% upside, while Goldman Sachs sees a 7% upside at a ₹4,370 target. Both firms cite the projected 10‑12% compound annual growth in order inflows and revenue through FY27 as a key driver. Risks linger, notably geopolitical tensions and potential cost overruns on legacy contracts, but the combination of a record order backlog, expanding international footprint, and strategic capital allocation suggests L&T is well‑positioned to sustain its market leadership and deliver shareholder value in the coming years.