L&T shares jump 4% post Q3 results; brokerage sees 20% more upside

Larsen & Toubro (L&T) stock emerged among the top performers on Wednesday, bucking the broader bearish trend that saw the Sensex tumble over 500 points in early trade.

While the wider market grappled with selling pressure, shares of the engineering and construction major rallied nearly 4% to day’s high of Rs 3,935.10 on the BSE. As of 10:25 am, the counter was at Rs 3,881, up 2.30%, cementing its position as the top gainer on Sensex, followed by Tata Steel.

L&T reported a consolidated net profit of Rs 3,215 crore for the quarter ended December 31, marking a decline of over 4% compared to Rs 3,359 crore in the corresponding period last year.

L&T’s revenue from operations witnessed a healthy double-digit growth, climbing over 10% to Rs 71,449 crore in the third quarter, against Rs 64,668 crore in the year-ago period. The company attributed this growth to the Hi-Tech manufacturing (34% yoy), energy (15% yoy) and IT services (12% yoy) businesses.

Brokerage firm JM Financial has maintained a ‘Buy’ rating on the stock, raising its target price to Rs 4,655 from Rs 4,500, implying a potential upside of 20% from current levels .

"Strong delivery on order inflows yet again with growth of 17% YoY significantly exceeding estimates," JM Financial said.

L&T secured orders worth Rs 135,600 crore during the quarter, registering a growth of 17% year-on-year, the highest ever for a quarter. Consequently, the consolidated order book swelled to a record high of Rs 7.33 lakh crore, up 30% year-on-year, it said.

According to JM Financial, the inflow surprise was driven by ultra-mega HVDC orders from Europe, and even when adjusted for these large wins, the inflows remained 5% ahead of their estimates .

JM Financial said the company's international prospects, particularly in the Middle East and through 4GW of offshore HVDC projects expected to be secured in FY27 .