Analysts remain bullish on L&T, see up to 16% upside on order book strength
Larsen & Toubro's shares face volatility, yet analysts remain optimistic about future growth. A record order book and strong capital expenditure demand underpin this positive outlook. Geopolitical issues impacted recent execution, but no major projects were cancelled. The company expects improved momentum and order inflows in the second half of FY27. Strategic divestments and investments in new…
Analysts remain optimistic about Larsen & Toubro (L&T), anticipating a potential 13-16% increase in the stock price from its recent closing at ₹3,915, driven by its impressive order book of ₹7.8 lakh crore as of June 2026, robust capital expenditure demands, and expanding offshore wind sector presence. Despite geopolitical tensions in West Asia and execution challenges in Q2 2026, L&T has not cancelled any major projects.
They anticipate a resurgence in execution momentum and order inflows during the second half of FY27. Although the company reported a year-over-year decline in EBITDA and margin contraction due to slower project execution and forex headwinds, analysts believe the strong order book and ongoing project wins will help maintain margins.
Orders are fueled by domestic private-sector demand, large infrastructure contracts, and massive offshore wind contracts in Europe. International projects make up 52% of the current order backlog, showcasing L&T's geographical diversification. Domestic private-sector investment is expected to be a key growth booster, especially in industrials, buildings, metals, energy, and real estate.
L&T also sees promising overseas opportunities, particularly in the Middle East's hydrocarbons, energy transition, and infrastructure sectors, with a ₹15 trillion prospect pipeline for the remaining FY27. The company has set a growth target of 10-12% in revenue and order inflows for FY27, despite the current challenges. L&T's optimism stems from anticipated improvements in logistics, completion of newly awarded projects, and better collections in the water and effluent treatment segment.
Additionally, divestitures like Nabha Power and stake sales in Hyderabad Metro, potentially finalized by September, will enable L&T to concentrate on its core engineering and technology businesses. Through its Lakshya 2031 strategy, L&T is investing in emerging sectors such as green energy, digital technologies, semiconductors, data centers, and advanced manufacturing.
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