Larsen & Toubro market cap nears ₹6 trillion; stock rallies 10% in 1 month

The divestment of Nabha Power for ₹3,660.87 crore is strategically positive for L&T as it aligns with the company's stated objective of exiting the development projects business, believe analysts.

Larsen & Toubro (L&T) market cap nears ₹6 trillion

 

Share price of Larsen & Toubro (L&T) hit a new high of ₹4,239.90, gaining nearly 1 per cent on the BSE in Tuesday’s intra-day deals. 

 

In the past one month, the stock price of the civil construction major has outperformed the market by surging 10 per cent. In comparison, the BSE Sensex was up marginally 0.06 per cent during the same period.

 

A sharp rally in the stock price has seen the market capitalisation of L&T inch towards ₹6 trillion. At 10:46 AM; L&T’s market capitalisation stood at ₹5.82 trillion - 3 per cent away from the ₹6 trillion milestone.

 

 

Currently, there are seven listed companies, Reliance Industries, HDFC Bank, Bharti Airtel, State Bank of India (SBI), ICICI Bank, Tata Consultancy Services (TCS) and Bajaj Finance that command a market capitalisation in excess of ₹ 6 trillion.

 

Why L&T outperformed market?

 

L&T, through its wholly-owned subsidiary L&T Power Development Ltd, has signed a Securities Purchase Agreement to divest 100 per cent stake in Nabha Power Ltd (NPL) to Torrent Power for a consideration of ₹3,660.87 crore (subject to closing adjustments), with completion expected by June 30, 2026. The divestment aligns with L&T’s strategy to exit the development projects business and monetise non-core assets.

 

According to ICICI Securities, the divestment of Nabha Power for ₹3,660.87 crore is strategically positive for L&T as it aligns with the company’s stated objective of exiting the development projects business and focusing on its asset-light EPC and core engineering segments. 

 

While NPL contributed ~1.73 per cent to consolidated turnover and ~3.64 per cent to net worth in FY25, monetising a mature 1,400 MW operational asset allows L&T to unlock capital from a relatively low-growth, regulated business and redeploy it into higher return core verticals such as infrastructure, defence, energy transition and manufacturing. Overall, the move is value-accretive from a capital allocation perspective and consistent with L&T’s long-term strategic repositioning, the brokerage firm said. 

CHECK Stock Market LIVE Updates

L&T – strong order book position, prospect pipeline

 

Meanwhile, L&T has a current order backlog of ₹7.33 trillion up 30 per cent Y-o-Y. The execution trends of Q3FY26, especially in infra, hydrocarbon and precision engineering space indicated execution momentum which led to the 9MFY26 revenue growth of 12 per cent YoY. This momentum is expected to continue in Q4FY26E and will enable L&T to meet revenue guidance of ~15 per cent Y-o-Y.  Given the prospects of ~₹5.9 trillion robust near-term bid pipelines, L&T expects to surpass order inflow growth of 10 per cent for FY26E on a larger base. Overall, analysts at ICICI Securities expect revenues and PAT to grow at compound annual growth rate (CAGR) of 15.6 per cent and 19.9 per cent over FY25-FY28E. The brokerage firm maintains BUY rating on L&T with target of ₹5030 (SoTP based).

 

L&T in an investor’s conference call on January 28, 2026 said the company’s prospect pipeline for the near term stands at ₹5.9 trillion vis-à-vis ₹5.51 trillion at the same time last year.

 

This pipeline is strong despite volatile oil prices as L&T remains focused on urban development, infrastructure, gas, renewables, AI and data centres in the international markets and B&F, thermal power, power T&D, urban infra, metals and minerals in the domestic markets. 

 

On the positive side, order inflows remained strong at ₹1.2 trillion, driven by large order wins in domestic and international markets, providing healthy visibility for revenue. An improved prospect pipeline of ₹5.9 trillion (up 7 per cent Y-o-Y), further reduction in NWC and healthy RoE give comfort in an environment where domestic execution and margin performance in select segments were weak, Motilal Oswal Financial Services said in the Q3 result update. The brokerage firm maintains BUY rating on L&T with a revised two-year forward target price of ₹4,600 (₹4,500 earlier).

 

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 etc, according to the analysts.  =========================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.