Larsen & Toubro Shares Soar to 10-Month High as Jefferies Fuels Optimism

Larsen & Toubro (L&T) shares have captured the market's attention, rocketing to an impressive 10-month high after leading global investment bank Jefferies significantly upgraded its outlook and price target for the infrastructure giant. This surge reflects growing confidence in L&T's robust financial health and promising growth trajectory.

On the back of this positive sentiment, L&T's stock climbed by 2.6 percent to reach Rs 3,747.85 on the BSE and Rs 3,750 on the NSE, marking its highest level in nearly a year.

Jefferies revised its rating for L&T from 'Hold' to a confident 'Buy,' simultaneously hiking its price target to an ambitious Rs 4,200 from the previous Rs 3,100. This substantial revision underscores the analysts' belief in L&T's strong execution capabilities, burgeoning order book, and strategic initiatives, including potential divestments in non-core assets like Hydel and Nabha Power.

The upgrade follows L&T's stellar performance in the fourth quarter of fiscal year 2024.

The company reported a consolidated net profit of Rs 4,396.12 crore, a healthy 10.3 percent increase year-on-year. Revenue from operations also saw a significant boost, rising 15 percent to Rs 67,078.68 crore. Crucially, L&T's order intake for FY24 demonstrated remarkable strength, soaring by 31 percent to an impressive Rs 3.03 lakh crore, highlighting its dominant position in the engineering and construction sector.

Further bolstering its global footprint, international orders constituted a substantial 52 percent of the total order inflow during Q4 FY24.

Looking ahead, L&T's management has set an optimistic tone for FY25, projecting a 15 percent growth in revenue and an 18 percent increase in order inflow, signaling continued expansion and robust project pipeline. This forward-looking guidance provides a clear roadmap for sustained performance and investor confidence.

The broader market sentiment echoes Jefferies' bullish stance, with a consensus among analysts leaning heavily towards a 'Buy' recommendation.

Out of 31 analysts covering L&T, a staggering 27 recommend 'Buy,' three suggest 'Hold,' and only one advises 'Sell,' with an average price target hovering around Rs 3,845. L&T's stock performance has been exceptional, delivering returns of over 16 percent in the last three months and an astounding 60 percent over the past year, clearly outperforming the broader market and solidifying its position as a top pick for investors.