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On Friday, Investec (LON:INVP) analyst Aditya Bhartia updated the firm’s outlook on Larsen & Toubro (NSE:LART) Ltd. (LT:IN) (OTC:LTOUF), increasing the price target to INR 4,115 from INR 4,030 while reiterating a Buy rating on the stock. Bhartia highlighted the company’s strong growth in order inflows and revenues for the fourth quarter and the full fiscal year 2025. The international markets were identified as the main growth drivers, with order inflows soaring by 149% year-over-year and revenues by 22% in the same period.
Larsen & Toubro’s domestic performance, however, showed a decline in order inflows by 43% year-over-year, though revenues saw a slight increase of 2%. Despite this, the company’s balance sheet metrics were robust, with working capital reduced further to 11% of trailing twelve months revenues, resulting in strong free cash flow from operations and a return on equity increase from approximately 15% in fiscal year 2024 to 16.3%.
The management of Larsen & Toubro provided an optimistic outlook for fiscal year 2026, forecasting a 10% growth in order inflows and a 15% increase in revenues. They also anticipate a modest expansion in core EBITDA margins to 8.5% and expect to sustain working capital at 12% of revenues. The prospect pipeline has expanded significantly, reaching Rs 19 trillion, up from approximately Rs 12 trillion a year earlier, driven largely by international markets.
Investec’s analysis commends Larsen & Toubro’s diversified sectoral and geographic presence and its ability to achieve growth with balance sheet discipline. The firm’s continued Buy rating reflects confidence in Larsen & Toubro’s performance and future prospects.
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