Historically, L&T had a hit ratio of 20-25% in the prospect pipeline, and if it maintains this hit rate, L&T could grow its order inflows far more than its FY26 guidance of 10% YoY growth.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Larsen and Toubro Ltd.'s Q1 FY26 revenue/profit after tax came in 3%/8% above our estimates. Results indicate-
sharp outperformance on core E&C order inflows at Rs 766 billion (our est. Rs 631 billion), driven by large order wins in Energy and Infrastructure segments in both domestic and international markets,
outperformance on execution with 19% YoY growth (our est. 13% growth), primarily driven by ramp-up in international projects,
sustainability of net working capital at lower levels of 10.1% of sales and RoE improvement to 17%.
However, Ebitda margin remained flat YoY for core E&C vs our expectation of a gradual improvement. The order prospect pipeline grew 65% YoY to Rs 15 trillion for the next nine months of FY26.
Historically, L&T had a hit ratio of 20-25% in the prospect pipeline, and if it maintains this hit rate, L&T could grow its order inflows far more than its FY26 guidance of 10% YoY growth.
In the GCC region, L&T hopes to scale up in areas like renewable, clean energy and transmission projects and correspondingly scale up the execution of existing projects.
We marginally increase core E&C revenue estimates and arrive at a revised SoTP-based target price of Rs 4,200 (from Rs 4,100 earlier), based on 28 times two-year forward earnings for core business and a 25% holding company discount to subsidiaries.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
