Larsen & Toubro (L&T) shares gained nearly 5 per cent in early trade on Friday on posted a 14 per cent increase in consolidated profit after tax to ₹3,359 crore for the December quarter, and a 17 per cent rise in revenue from operations to ₹64,668 crore in the quarter under-review.

The stock closed among top gainers of Nifty 50 pack, 4.18 per cent positive at ₹3,564, after hitting a high of ₹3,590. On the BSE, it ended 4.31 per cent higher at ₹3567.20.

Brokerages valued L&T’s strong order book and execution, stating that the order inflow was driven by a healthy mix of domestic and international orders, thereby allaying concerns about weaker domestic inflows so far. 

Domestic brokerage Motilal Oswal has maintained a positive stance and expects it to further benefit from new initiatives across electrolyzers, semiconductors, data centers, and real estate in the coming years.

Meanwhile, analysts of JM Financial stated that the company has reported weak earnings as PAT missed consensus estimates impacted by weaker margins. The brokerage retained a buy at a revised target price of ₹4,015 from ₹3,825 earlier.

Motilal’s report added that margin improvement has fallen short of its expectations and the brokerage expects it to improve as certain large projects in the Middle East reach the revenue and margin recognition stage.

Maintaining buy at an unchanged target price of ₹4,300, Motilal reasoned in its report that a 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 could be few downside risks as it trimmed FY25/26/27 estimates by slightly lower margins for core engineering and construction (E&C) segment.

Morgan Stanley has an overweight call at a target price of ₹4,278.

Two other global brokerages CLSA and Bernstein have an outperform rating on the stock at the target prices of ₹4,151 and ₹3,922, respectively.

Nuvama Institutional Equities has retained buy at an unchanged target price of ₹4,000. Quoting that the company has delivered stellar Q3FY25 order inflows, the brokerage is positive on the strong order book and rising execution. However, a margin uptick may still be some time away.

“Q4FY25 pipeline remains healthy at INR5.51tn across Infra, hydrocarbons and heavy engineering—including four–five large ticket-size orders,” it added.

However, Emkay Global sees 33 per cent upside potential, reiterating buy on L&T at a target price of ₹4,550. The brokerage expects domestic segment to also see uptick ahead. 

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