Larsen & Toubro gains 3%; what's driving capital goods stock on Monday?

Budget impact: Sustained capex growth and identification of 7 high-speed rail corridors enhances medium- to long-term order inflows for EPC, railways, power transmission, defence and capital goods cos

Larsen & Toubro (L&T) share price today

 

Share price of Larsen & Toubro (L&T) gained 3 per cent at ₹3,930, erasing its entire Sunday’s losses, on the BSE in Monday’s intra-day deals. 

 

The stock price of the capital goods company had declined 3 per cent to ₹3,813, against its Friday’s close of ₹3,933.45 on the BSE on Sunday in Budget Day's trading session. 

 

At 09:36 AM; L&T share price was quoting 2.8 per cent higher at ₹3,919.70, as against 0.39 per cent rise in the BSE Sensex. The stock price of L&T had hit a record high of ₹4,194.70 on January 5, 2026.  FOLLOW LATEST STOCK MARKET UPDATES TODAY LIVE

What’s driving L&T stock price on Monday?

The Budget maintains a strong capex-led growth focus, with FY27BE capital expenditure budgeted at ₹12.21 trillion, up 11.5 per cent year-on-year (YoY), and capex-to-GDP held steady at 3.1 per cent. Key measures include extension of customs duty exemptions for nuclear power projects (till 2030–35), critical mineral processing, Battery Energy Storage Systems (BESS) and solar glass inputs. The government also proposed a new Construction & Infrastructure Equipment (CIE) scheme and announced seven high-speed rail corridors across major economic routes. 

According to ICICI Securities, the Budget is structurally positive for the capital goods sector, reinforcing multi-year demand visibility. Duty exemptions lower project and manufacturing costs, supporting faster scale-up in nuclear, storage and renewable-linked equipment. The proposed CIE scheme aids domestic manufacturing, technology upgradation and import substitution in high-value construction equipment.  

Meanwhile, sustained capex growth and the identification of seven high-speed rail corridors enhance medium- to long-term order inflows for EPC, railways, power transmission, defence and core capital goods players like L&T, BHEL,KSB, Kilburn etc, the brokerage firm said in a note.  ALSO READ | Delhivery stock up 5% in 2 days post Q3; analysts see strong growth outlook

Brokerages view on L&T

Securing order inflow over and above the guidance range speaks of the diversity of the company’s operations. Analysts at ICICI Securities believe given the backlog growth and pick up in execution there remains a strong revenue growth over the medium term. With continued focus on improvement of overall return ratios and aspiration of 18 per cent ROE by 2026E looks probable. The brokerage firm maintains BUY rating with target of ₹5,030 (SoTP based). 

Record order inflows, steady execution and sharp cashflow improvement in the December quarter (Q3) highlight L&T’s operational strength and multi-year visibility. Continued scaling in energy transition, Middle East hydrocarbons, renewables, data centers, semiconductors and defence, alongside disciplined bidding and balance sheet optimization, positions L&T for the upcoming Lakshya 2027–32 plans, analysts at Elara Capital said in the results update. The brokerage firm reiterated its 'Accumulate' rating on the stock with a target price of ₹4,487 based on a SOTP valuation. 

Strong delivery on order inflows yet again with growth of 17 per cent YoY significantly exceeding estimates. Core (ex-services) sales growth was modest and missed estimates but a surge in high margin Realty sales (included in others segment) offset margin weakness due to the impact of legacy projects in Energy, analysts at JM Financial Institutional Securities said. The brokerage firm expects the order inflow strength to sustain in FY27 (est 11 per cent growth). It maintains BUY with a higher target price of ₹4,655.  ===================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.