L&T, Jindal Steel, PB Fintech, Star Health, Shree Cement, Happiest Minds Q2 Review — HDFC Securities

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HDFC Securities Institutional Equities

Larsen & Toubro - Muted execution; strong order inflow

Larsen & Toubro Ltd. reported revenue/Ebitda/APAT at Rs 679.8/68.1/39.3 billion, a miss of 5.4/5.2/6.4%, marked by slower execution in water projects and extended monsoons.

Plant and machinery margins stood at 7.8% in Q2 FY26 (vs 7.6/7.6% in Q1 FY26/Q2 FY25). Given robust order inflows of Rs 2.1 trillion (+39% YoY) in H1 FY26, L&T now expects to beat earlier 10% order inflow growth guidance for FY26.

Revenue growth guidance is maintained at 15%, with P&M margin guidance at 8.5%. Net working capital to sales stood at 10.2% (Q2 FY25: 12.2%) and L&T has maintained FY26 guidance at 12%. L&T expects to realize Rs 21 billion from Hyderabad metro asset transfer to Telangana Government by FY26-end.

Diminution in metro investment/equity of Rs 54 billion is provided in Q2 FY26 standalone results and transaction closure will be neutral for standalone and gain in consolidated as book value is pegged at Rs 10 billion vs expected Rs 21 billion realization.

Given-

1. the record-high order book of Rs 6.7 trillion,

2. focus on advance business segments such as semiconductors, solar PV plants, and data centers,

3. improvement in subsidiary performance, and

4. higher public capex toward a infrastructure and green economy,

we maintain our Buy stance with an SOTP-based target price of Rs 4,545 per share (29x Sep-27E EPS core). EPS cut to reflect muted Q2 FY26 execution, increase in target price is owing to upward calibration of subsidiary valuations and rollover of core EPS.

Jindal Steel - Subdued quarter; strong volume outlook for H2FY26

We maintain Buy rating on Jindal Steel and Power Ltd. with a revised target price of Rs 1,120/share (6.5x its Sep’27E consolidated Ebitda). In Q2 FY26, JSPL’s volume grew a modest 1% YoY (against industry growth of 9%), owing to maintenance shutdown.

Further, the slump in steel prices, maintenance expenses, and external metallics purchase pulled the margin down to a 10- quarter low. The management remains upbeat on volume growth, accelerating Q3 FY26 onwards on ramp-up of Angul phase-2 expansion. Expected stability in steel prices and cost saving efforts should also drive the margin rebound.

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