Motilal Oswal remains bullish on Larsen and Toubro as a sharp ramp-up in domestic and international order inflows strengthens the company's growth outlook despite execution challenges linked to the West Asia crisis. L&T has historically maintained more than 20% market share in the overall prospect pipeline. The company has a prospect pipeline of Rs 15 trillion for 9M FY27 across domestic and international markets, highlights the brokerage.
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Motilal Oswal Report
Larsen and Toubro Ltd.'s shares may likely remain in focus as Motilal Oswal has reiterated its 'Buy' rating and has set a SoTP-based target price of Rs 4,400, based on 25 times on Dec'28E earnings for the core business and a 25% holding company discount to subsidiaries, implying a potential upside of 19% from the reports current market price of Rs 3,702, citing robust order inflows in past few months on both domestic and international front, supported by large and mega projects.
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With a prospect pipeline of Rs 15 trillion for 9M FY27 and an order book of Rs 7.8 trillion as of Jun'26, the brokerage expects L&T's core EPC order inflows and revenue to grow at 10%/14% CAGR over FY26-29.
The brokerage noted that L&T's inflows stood at Rs 87,300 crore as of Q1 FY27, and announced order inflows during Q2 FY27 have ramped up sharply since then across domestic and international segments for large, mega and ultra-mega projects.
Despite the ongoing West Asia crisis, ordering from the Middle East has ramped up sharply with L&T announcing more than Rs 77,500 crore worth of orders so far from hydrocarbon, offshore projects, infrastructure, gas compression plants and BESS.
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Domestic ordering announced during Q2 FY27 includes NTPC thermal power projects, DVC thermal power project, platform and pipeline projects from ONGC and a mega order from NVIDIA for building India's largest NVIDIA B300 AI factory.
Going ahead, the company is optimistic about inflows from both domestic and international geographies and currently bake in order inflows worth Rs 3.8 trillion/Rs 4.3 trillion for L&T for FY27/28, with H1 FY27 announced inflow run rate ranging around Rs 2 trillion.
Key risks and concerns
Continuation of West Asia crisis and blockage of SoH, slowdown in order inflows, delays in the completion of mega and ultra-mega projects, a sharp rise in commodity prices, an increase in working capital, and increased competition are a few downside risks to Motilal Oswal estimates.
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