L&T shares jump 4% after firm's Q1 earnings beat estimates: Should you buy, sell or hold?

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26 Aug, 2025 12:21

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The shares of Larsen and Toubro (L&T) gained more than 4 percent in morning trade on July 30, as market positively responded to the engineering and construction major's June quarter earnings. The shares were trading at Rs 3,651, emerging as the top Nifty 50 gainer.

The company on July 29 reported a consolidated net profit of Rs 3,617 crore for the April-June quarter of the financial year 2026. This marks a 30 percent on-year rise from the Rs 2,786 crore net profit reported in the same quarter last year.

According to a Moneycontrol poll of six brokerages, the net profit of the engineering, procurement, and construction (EPC) major was expected to grow 25 percent year-on-year (YoY) to Rs 3,469 crore.

L&T's revenue from operations rose 15.5 percent on-year to Rs 63,679 crore in Q1 FY26, as against Rs 55,120 crore in the year-ago period. Moneycontrol's poll had projected the firm's consolidated revenue to rise 15 percent YoY to Rs 63,451 crore.

The company said the order inflow for the quarter ended June 30, 2025 stood at Rs 94,453 crore, registering a growth of 33 percent over the corresponding quarter of the previous year, due to the strong ordering momentum from countries in the Middle East

Jefferies maintained its 'Buy' call on the stock, and raised its target price to Rs 4,230 apiece from the earlier Rs 3,965 apiece. The international brokerage said that the firm's Q1 EBITDA was 7 percent ahead of its expectations as execution was higher. L&T’s 33 percent on-year rise in order inflows puts the company in a comfortable position to meet guidance, it added.

Jefferies however noted that the firm's 15 percent YoY revenue growth guidance looks low, given the order book growth.

JM Financial kept a 'Buy' call on the stock, but hiked its target price by 12 percent to Rs 4,313 per share. This implies an upside potential of more than 23 percent from the stock’s previous closing price. “L&T delivered strong positive surprise with order inflows at INR 945bn materially higher than our estimate of INR 566bn. We are reasonably confident of L&T exceeding its order inflow target of 10% growth based on multi-year uptick in Middle East tendering,” the domestic brokerage said, while adding that L&T was its top pick in the infrastructure space.

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