Emkay Global maintains 'Buy' on L&T with target price of Rs 4,000
The L&T stock currently trades at a core Price to Earnings (P/E) multiple of 27 times and 22 times its FY26E and FY27E earnings per share (EPS), respectively. This presents an attractive risk-reward balance, Emkay said.
- Jun 16, 2025,
- Updated Jun 16, 2025 3:35 PM IST
Emkay Global has reiterated its 'Buy' recommendation on Larsen & Toubro (L&T), setting a target price of Rs 4,000. Emkay emphasized L&T's strategic advantage in both the Indian and Middle Eastern markets, thanks to a strong capital expenditure (capex) growth and a diversified order book. This positioning is expected to support L&T's sustained performance.
L&T's prospective order pipeline for FY26 is projected at Rs 19 lakh crore, marking a 56 per cent year-on-year increase from Rs 12.1 lakh crore a year earlier, Emkay Global said on Monday. This surge is largely attributed to a 135 per cent year-on-year growth in international prospects, now standing at Rs 12 lakh crore, while domestic growth remains steady at approximately Rs 7 lakh crore. Key international markets such as Hydrocarbon, Power Transmission & Distribution (T&D), Renewable, and Infrastructure sectors are identified as promising.
L&T is seeing new opportunities in sectors like Offshore Wind, Gas-based Power Plants, and Minerals, particularly in regions including North America and the Far East, Emkay Global said. These developments are expected to further bolster L&T's order pipeline and strengthen its market presence globally, it said.
Emkay Global noted that nuclear energy represents a baseload, emission-free energy source undergoing a global revival. As countries revisit their nuclear strategies due to increased energy demands from industrialisation and urbanisation, L&T is poised to benefit from these shifts. India's ambitious plan to establish a 100 GW nuclear capacity by 2047, supported by a Rs 20,000 crore government allocation, provides a significant opportunity for L&T.
L&T is among the three Indian firms selected for technology transfer of Small Modular Reactors (SMRs) by the US Department of Technology, positioning it at the forefront of nuclear energy commercialisation in India. This strategic positioning highlights L&T's readiness to navigate the evolving nuclear energy landscape.
Despite challenges such as selective private capex and skilled labour shortages, L&T's unmatched scale and capability enable it to manage short-term volatility in the capex cycle. The company stands to benefit from long-term capex growth trends in both domestic and international markets, particularly in the Middle East.
L&T currently trades at a core Price to Earnings (P/E) multiple of 27x and 22x its FY26E and FY27E earnings per share (EPS), respectively. This presents an attractive risk-reward balance, given the expected 23 per cent compound annual growth rate (CAGR) in EPS from FY25 to FY27, strong returns with Return on Equity (RoE) approaching 18 per cent by FY28, and robust cash flows.
The stock's current multiple is also at a discount compared to its historical average of 23x, making it appealing against the broader industrial and infrastructure space. L&T's prospects of strong earnings growth and higher RoE enhance its investment attractiveness, according to Emkay Global.
Emkay Global has reiterated its 'Buy' recommendation on Larsen & Toubro (L&T), setting a target price of Rs 4,000. Emkay emphasized L&T's strategic advantage in both the Indian and Middle Eastern markets, thanks to a strong capital expenditure (capex) growth and a diversified order book. This positioning is expected to support L&T's sustained performance.
L&T's prospective order pipeline for FY26 is projected at Rs 19 lakh crore, marking a 56 per cent year-on-year increase from Rs 12.1 lakh crore a year earlier, Emkay Global said on Monday. This surge is largely attributed to a 135 per cent year-on-year growth in international prospects, now standing at Rs 12 lakh crore, while domestic growth remains steady at approximately Rs 7 lakh crore. Key international markets such as Hydrocarbon, Power Transmission & Distribution (T&D), Renewable, and Infrastructure sectors are identified as promising.
L&T is seeing new opportunities in sectors like Offshore Wind, Gas-based Power Plants, and Minerals, particularly in regions including North America and the Far East, Emkay Global said. These developments are expected to further bolster L&T's order pipeline and strengthen its market presence globally, it said.
Emkay Global noted that nuclear energy represents a baseload, emission-free energy source undergoing a global revival. As countries revisit their nuclear strategies due to increased energy demands from industrialisation and urbanisation, L&T is poised to benefit from these shifts. India's ambitious plan to establish a 100 GW nuclear capacity by 2047, supported by a Rs 20,000 crore government allocation, provides a significant opportunity for L&T.
L&T is among the three Indian firms selected for technology transfer of Small Modular Reactors (SMRs) by the US Department of Technology, positioning it at the forefront of nuclear energy commercialisation in India. This strategic positioning highlights L&T's readiness to navigate the evolving nuclear energy landscape.
Despite challenges such as selective private capex and skilled labour shortages, L&T's unmatched scale and capability enable it to manage short-term volatility in the capex cycle. The company stands to benefit from long-term capex growth trends in both domestic and international markets, particularly in the Middle East.
L&T currently trades at a core Price to Earnings (P/E) multiple of 27x and 22x its FY26E and FY27E earnings per share (EPS), respectively. This presents an attractive risk-reward balance, given the expected 23 per cent compound annual growth rate (CAGR) in EPS from FY25 to FY27, strong returns with Return on Equity (RoE) approaching 18 per cent by FY28, and robust cash flows.
The stock's current multiple is also at a discount compared to its historical average of 23x, making it appealing against the broader industrial and infrastructure space. L&T's prospects of strong earnings growth and higher RoE enhance its investment attractiveness, according to Emkay Global.