After taking a heavy beating in trade on Wednesday, Larsen & Toubro is in focus once again on Thursday after receiving a target price cut by Jefferies. The brokerage firm remains overall bullish on the infra giant but has quantified the potential impact of the ongoing tension in the Middle East, which is a key market for the company.
In its latest note, Jefferies has maintained a 'buy' call on L&T but has cut the target price from Rs 4,715 to Rs 4,500. This comes just a day after the L&T stock fell as much as 4.5% on Wednesday's trade amid fears that the escalations in the Middle East may have severe ramifications for the company.
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The report adds that global engineering and construction companies, including L&T, are down between 10-24% since the start of the Iran-US-Israel conflict. L&T, for its part, is down about 10% in the last five sessions.
Much of the investor fear surrounding L&T stems from the fact that a chunk of its order book comes from the Middle East. Indeed, 37% of L&T's order book comes from the region, with Saudi Arabia having a lion's share at 75%.
Jefferies calculates that a month of no work should result in an FY26 earnings per share impact of around 6-8%. However, the brokerage firm believes that L&T will be able to recover most of the share price losses thanks to key company fundamentals.
Some of those key fundamentals include strong order book growth, margin stability and a five-year strategy plan that is due to be unveiled in May 2026.
READ MORE: L&T Shares Tumble 7% Amid Middle East Conflict — Is This The Right Time To Buy?
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