Despite the cuts in price targets, 31 out of the 36 analysts that have coverage on L&T have retained their “buy” recommendation on the stock. Three of them have a “hold” rating, while two of them have a “sell” call on the stock.
For financial year 2025, L&T expects to win 10% more orders than it did in financial year 2024. It also expects its topline to grow by 15% from the year gone by. However, the company guided margins to be at 8.25% for financial year 2025. The guidance estimate among analysts ranged from 9% to 9.5% for the year.
Brokerage firm CLSA retained its “buy” rating on L&T but cut its price target to ₹4,151 from ₹4,260 earlier. It cited a big beat to the order inflow guidance as a key positive and also highlighted the company’s robust execution.
CLSA also said that L&T has an improving outlook with a 24% year-on-year growth in its pipeline, despite a likely slowdown in Middle Eastern capex.
Jefferies cut its price target on L&T to ₹3,970 from ₹4,135 earlier but also retained its “buy” rating on the stock. It said that the prospect pipeline for L&T gives scope for upside surprise potential for the management 10% order inflow guidance for the year.
However, the brokerage said that the company’s 15% revenue growth guidance appears low considering the orders it won in financial year 2024.
Some other brokerages who have cut their price targets on L&T include Morgan Stanley, who cut their target from ₹4,106 earlier to ₹3,857, while Goldman Sachs cut their price target to ₹3,600 from ₹3,900 earlier. However, both of them retained their bullish stance on the stock.
Bernstein has retained its “outperform” rating on the stock and kept its price target unchanged at ₹3,800. The brokerage had anticipated management to guide for 9% margin in the new financial year, which turned out to be lower.
It also sees a risk to guidance given the elections and uncertainties in the middle east. It highlighted L&T’s strong working capital position as a key highlight for the quarter.
Citi mentioned that it is not “unduly concerned” by L&T’s flat margin guidance for the year. It termed the company’s guidance for financial year 2025 as “healthy.”
Shares of L&T ended 1.6% higher on Wednesday. For 2024, the stock is flat, down 1.2% so far.
