L&T rallies 5% in weak market on strong Q4 operational performance, outlook

Analysts at ICICI Securities believe that given the backlog growth (book to bill >2 years) and strong operational execution, the company will achieve strong revenue growth over the medium term.

Share price of Larsen & Toubro today

 

Share price of engineering and construction major Larsen & Toubro (L&T) surged 5 per cent to ₹ 3,477.55 on the BSE in Friday’s intra-day trade in n otherwise weak market after the company reported a strong operational performance for the March 2025 quarter (Q4FY25). In comparison, the BSE Sensex was down 0.98 per cent at 79,551 at 09:59 am.

 

L&T Q4 result, recommends final dividend of ₹ 34 per share

 

L&T reported a 25 per cent rise in net profit attributable to the owners of the company for the January–March quarter of 2024-25 (Q4FY25), owing to higher revenues and an exceptional gain. For the quarter under review, L&T posted a consolidated net profit of ₹ 5,497.3 crore, while revenue rose 10.9 per cent year-on-year (YoY) to ₹ 74,392.28 crore.

 

 

Earnings before interest, tax, depreciation, and amortisation (Ebitda) was ₹ 8,203 crore, up 13 per cent YoY, while the Ebitda margin remained stable at 11.0 per cent, against 10.8 per cent in Q4FY24.

 

Order inflow for the quarter ended March 31, 2025, stood at ₹ 89,613 crore, up 24 per cent YoY. International orders, at ₹ 62,739 crore during the quarter, constituted 70 per cent of the total, the company said.

 

As of March 31, 2025, L&T’s consolidated order book stood at ₹ 5.79 trillion, up 22 per cent YoY, with international orders accounting for 46 per cent of the total. During the year, the group secured new orders worth ₹ 3.56 trillion.

 

Meanwhile, the board of directors recommended a final dividend of ₹ 34 per share of the face value ₹ 2 each for the financial year ended March 31, 2025 (previous year final dividend ₹ 28 per share).  Follow Stock Market LIVE Updates Here

 

Management commentary and outlook

 

Despite the turbulent global geopolitical dynamics, the Indian economic landscape continues to demonstrate resilience and stable growth. Driven by continuing public infrastructure investments and a revival in private investments in areas like Energy Transition, Data Centers and Real Estate, India’s economic growth is expected to continue. Additionally, the government's prudent fiscal policies and efforts to improve domestic demand complimented by RBI’s accomodative monetary policy management to anchor inflation within acceptable range is expected to improve the momentum and quality of growth.

 

The Middle East continues its investments in traditional areas like Oil and Gas as well as basic infrastructure, besides earmarking funds for Energy Transition and non-oil industrialization. The management remains cautiously optimistic. Amid this backdrop, the Company will continue to look for opportunities which are aligned with its vision of pursuing profitable and return accretive growth.

 

Brokerage view – ICICI Securities

 

L&T has given guidance of 15 per cent revenue growth, 10 per cent order inflow growth, 8.5 per cent margin and 12 per cent net working capital (NWC) to sales for FY26E. The ROE of the company improved 140 bps YoY to 16.3 per cent in FY25.

 

Securing order inflows above the guidance range speaks of the diversity of the company's operations. The brokerage firm believes given the backlog growth (book to bill >2 years) and strong operational execution, the company will achieve strong revenue growth over the medium term. With continued focus and improvement in overall return ratios, reaching 18 per cent aspirational ROE seems probable. Hence, ICICI Securities believes L&T will remain their best capex play in the large-cap capital goods space.  ALSO READ | Titan shines 5% on Q4 earnings surprise; should you buy, hold or sell?

 

Brokerage view – Motilal Oswal Financial Services

 

Domestic prospect pipeline is largely flat YoY and the company’s inflows from the domestic segment were down 15 per cent YoY. L&T is selectively bidding for domestic projects and is eyeing projects across infrastructure, heavy civil, building & factories, metals and mining, and thermal power. It is going slow on water-related projects, which have seen delayed payments and stretched working capital.

 

L&T is optimistic about spending in the Gulf Cooperation Council (GCC) region for renewable, clean energy and transmission projects and has strong funding lines for existing projects, despite oil prices hovering around $60 per barrel. The brokerage firm expects L&T’s execution to remain strong with a strong order book. 

 

“We remain positive on L&T considering its ability to benefit from a large prospect pipeline and maintain healthy NWC and RoE. We thus raise our inflow and execution estimates for core E&C. However, with a reduction in estimates and valuation for IT subsidiaries, our target price was revised to ₹ 3,950 (from ₹ 4,100) based on 28x Mar’27E earnings for core business and a 25 per cent holding company discount to subsidiaries. We maintain 'BUY', Motilal Oswal Financial Services said in the Q4 result update.  ALSO READ | Bharat Dynamics, HAL, GRSE spike up to 5% amid Indo-Pak border tensions

 

About Larsen & Toubro

 

Larsen & Toubro is a $ 27 billion Indian multinational enterprise engaged in engineering, procurement and construction (EPC) Projects, Hi-Tech Manufacturing, and Services, operating across multiple geographies. A strong, customer–focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for eight decades.