Shares of infra major Larsen & Toubro (L&T ) fell nearly 4% on Wednesday, 6 May, after the company reported its March quarter results. L&T share price declined as much as 3.85% to ₹3,900 apiece and was the worst-performing stock on the BSE.
L&T reported a 3% year-on-year (YoY) decline in its consolidated net profit for the January-March quarter of FY26 to ₹5,325.60 crore. The company’s profit stood at ₹5,497.26 crore in the same period last year, led by an exceptional gain.
The consolidated revenue from operations in Q4FY26 grew 11.25% to ₹82,762.16 crore from ₹74,392.28 crore, YoY.
EBITDA during the March quarter increased by 5% to ₹8,610 crore from ₹8,203 crore in the same period last year, while margins declined sharply by 60 bps to 10.4% from 11%, YoY.
L&T’s consolidated order inflows in Q4FY26 stood at ₹89,772 crore. As of FY26, the consolidated order book of the company stood at an all-time high of ₹7,40,327 crore, reflecting a 28% YoY growth.
The company’s board also recommended a final dividend of ₹38 per share of the face value of ₹2 each for the fiscal year ended March 2026.
Should you buy L&T shares after Q4 results?
L&T’s consolidated Q4 results and full-year FY26 were slightly weaker than analysts’ estimates on lower-than-expected execution in core EPC. Core EPC execution growth stood at 12% YoY during the year and was impacted by delays in domestic water projects as well as disruption due to the US-Iran war in the Middle East.
Motilal Oswal expects core E&C revenue, EBITDA and PAT to clock a CAGR of 19%, 21% and 26% over FY26-28.
At the current price, for core E&C, L&T share price is trading at 31x/23x P/E on FY27/28E earnings. Rolling forward to June 2028, Motilal Oswal arrives at a revised SoTP-based L&T share price target of ₹4,550 as against ₹4,200 earlier, based on 25x two-year forward earnings for the core business and a 25% holding company discount to subsidiaries.
Key risks and concerns include 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 our estimates.
ICICI Securities said that L&T reported subdued Q4FY26 revenues, largely attributable to the geopolitical disruptions in the Middle East. Also, the expected margins improvement has not materialised on account of a miss in revenues and higher raw material cost.
The brokerage firm downgraded L&T shares to ‘Add’ from ‘Buy’ and cut the target price to ₹4,300 per share from ₹5,000 earlier.
PL Capital expects short-term execution risks to remain for L&T due to supply chain challenges amid the Middle East conflict.
Meanwhile, it believes L&T is well-placed to benefit in the long run owing to strong international prospects led by the Middle East, a healthy domestic pipeline on the back of public-driven capex and uptick in private capex, liquidation of loss-making development projects and penetration in newer areas such as green energy, electrolyzers, semiconductors, data centres, EMS, etc.
The brokerage firm revised its FY27-28 EPS estimates by -8.0%/- 10.4%, factoring in supply chain constraints and execution challenges. It maintained a ‘Buy’ rating and cut L&T share price target to ₹4,632 apiece from ₹4,806 earlier.
L&T Share Price Performance
L&T share price has gained over 5% in a month and has fallen over 3% in three months. The large-cap stock has rallied 18% in a year and has surged 65% in three years. L&T shares have delivered multibagger returns of 193% over the past five years.
At 12:15 PM, L&T share price was trading 3.35% lower at ₹3,920.30 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
