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Investing.com - Larsen & Toubro (NSE:LART) Ltd. (NS:LT) maintained its Outperform rating and INR4,176.00 price target at CLSA following the company’s first-quarter results that exceeded expectations in several key areas.
The engineering and construction giant reported new orders up 33% year-over-year, with execution rising 18% compared to the same period last year. The company secured what CLSA described as its second-biggest power equipment order ever at $2.5 billion, driven by India’s plans to add 80GW of new fossil capacity.
Larsen & Toubro’s prospects pipeline for fiscal year 2026 year-to-date stands at $170 billion, representing 64% growth, though CLSA noted this guidance appears optimistic given the current environment and perception of slowing Middle East activity.
The company demonstrated improvement in working capital management while maintaining flat core Engineering & Construction margins. Its return on equity increased by 230 basis points as efforts to improve return ratios showed results.
CLSA expects margins to improve in fiscal years 2026-2027 as the company shifts toward energy orders and benefits from maturity in execution, positioning Larsen & Toubro as a key beneficiary of capital expenditure cycles in both India and the Middle East.
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