L&T Shares Dip 1% Despite Positive Outlook and ₹4,210 Target by Macquarie

Shares of Larsen & Toubro (L&T), a leading construction firm, declined by over 1% to ₹3,870, marking a third consecutive trading session of losses. This drop occurred despite Macquarie maintaining an 'outperform' rating on the stock, citing positive growth drivers.

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Macquarie has set a price target of ₹4,210, indicating a potential upside of over 7% from the previous NSE closing price. However, L&T's year-to-date gain of 10% has lagged behind the Nifty's 13% increase during the same period.

The brokerage emphasized favorable working capital conditions in the Middle East, which has led L&T to relocate senior management to the region. Domestically, the company remains cautious about state government capital expenditure (capex) projects but expects central government capex to accelerate in the second half of the fiscal year. Notably, 70-75% of the company’s order inflows are anticipated to come from government projects.

Macquarie also highlighted growth opportunities in transportation and energy-related projects, alongside the development of L&T's offerings in electrolyzers, green hydrogen, and data centers. Additionally, the company’s entry into the semiconductor sector is a key area of interest.

In other developments, L&T recently won a case overturning a ₹702 crore customs duty demand. The Central Excise & Service Tax Appellate Tribunal in Ahmedabad ruled in the company’s favor, dismissing an earlier decision by the Principal Commissioner of Customs, Ahmedabad, which had denied the company customs duty exemptions. L&T had challenged the initial order in the tribunal.

For the quarter ending September 30, 2024, L&T reported a 5.4% year-on-year (YoY) increase in net profit, reaching ₹3,395.3 crore, up from ₹3,223 crore in the same quarter last year. Revenue from operations surged 20.6% YoY to ₹61,554.6 crore compared to ₹51,024 crore in the year-ago period.

At approximately 10:45 am, L&T share price were trading at ₹3,876, reflecting a 1% decline from the previous close.