Shares of Larsen & Toubro (L&T) recovered more than 2 per cent in early trade on Thursday, rebounding from the previous session’s decline even as brokerages flagged near-term uncertainties linked to the West Asian conflict and technology disruption.
Larsen & Toubro shares rise over 2 per cent, recovering from loss in the previous session
Jefferies retains buy, cuts target price to ₹4,500
Motilal Oswal Financial Services maintains buy, lowers target to ₹4,400
Brokerages flag risks from West Asia exposure and AI-led disruption to IT subsidiaries
The stock had dropped nearly 4.5 per cent on March 4, 2026, to close at ₹3,882.60. In Thursday’s session, it climbed to an intraday high of ₹3,971. At 10.36 am, the stock was trading at ₹3,960.20, up a little over 2 per cent from the previous close.
L&T shares surge in early trade
Brokerages remain positive on the company’s long-term growth prospects, although some have trimmed their target prices amid evolving geopolitical and sectoral risks.
Jefferies has maintained its buy rating on L&T but reduced its target price to ₹4,500 from ₹4,715 earlier. The brokerage said global engineering and construction companies with exposure to West Asia, including L&T, have seen their shares decline between 10 per cent and 24 per cent since the Iran–Israel conflict began.
According to Jefferies, about 37 per cent of L&T’s order book comes from West Asia, with Saudi Arabia accounting for a lion’s share of more than 75 per cent. It added that if project activity is halted for a month, the company’s FY26 earnings per share could be impacted by around 6–8 per cent. However, the brokerage expects the stock to recover most of its losses supported by order flow growth, margin stability and the company’s five-year strategy plan expected to be unveiled in May 2026.
Meanwhile, Motilal Oswal Financial Services said L&T’s investment case is gradually shifting from a “sum-of-the-parts” framework to a “moving parts” thesis due to the evolving global environment. The brokerage noted that while the company has a strong order book and healthy earnings visibility over FY25–FY28, near-term headwinds persist.
Motilal Oswal highlighted two key concerns: international revenue exposure, with West Asia accounting for nearly 39–40 per cent of L&T’s total order book as of the first nine months of FY26, and valuation pressure on its IT subsidiaries due to AI-led disruption.
The brokerage said uncertainties surrounding West Asia could affect project execution and margins in the near term. As a result, it reduced the valuation multiple for the core business to 25 times from 27 times earlier and lowered its two-year forward target price to ₹4,400 from ₹4,600, while retaining a buy recommendation.
Kotak Institutional Equities, in its latest report, said it expects the pace of EBITDA margin expansion to remain limited over the next two years. Global brokerages Macquarie and CLSA maintained outperform ratings at ₹4,910 and ₹4,842 target prices, respectively.
Despite the near-term volatility, analysts continue to highlight L&T’s strong order pipeline and growth opportunities in areas such as defence, data centres and real estate as key long-term drivers for the engineering major.
Published on March 5, 2026