'Quiet Outperformer': L&T Beats Nifty For Five Years Running, Jefferies Hikes Target Price

Jefferies has issued a target price hike for Larsen & Toubro Ltd., calling the stock a 'quiet outperformer' due to its superior performance against the Nifty index over a period of one to five years.

The brokerage firm maintained a 'buy' rating on the counter while hiking the target price from Rs 4,230 to Rs 4,345, reiterating its confidence on the company's order book trajectory and growth in the near future.

According to the note, L&T has outperformed the Nifty index over the last six months, one-year and five-year periods by a margin between 1-201%.

The firm also believes that L&T is on track to achieve or even surpass its guidance for financial year 2026 for revenue, margin and order flow.

Jefferies, in fact, projects 20% growth for L&T's core Engineering & Construction (E&C) Ebitda, which accounts for a notable increase from 16% growth that was observed between FY15 and FY19.

This is buoyed by the company's strong order book and the management's knack for historically giving conservative guidance.

Jefferies did acknowledge L&T's guidance for flat margins in FY25, but labelled it as a cautious move by the management.

The brokerage firm expects the company to continue receiving strong domestic order inflows, which usually attracts better margin yield. This, combined with a stable overseas project performance, may likely lead to an upward revision.

Overall, Jefferies believes L&T's strong order book, particularly in the oil and gas segment, coupled with a clear path to enhanced profitability, makes a compelling case for the stock.

L&T currently trades at a relative strength index of 60, which suggests neutral market sentiment.

Twenty eight out of the 34 analysts tracking L&T have a 'buy' rating on the stock, four recommend a 'hold' and two suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets is Rs 4,089, which implies a potential upside of 7%.