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500510: Defence And Energy Projects Will Support Balanced Medium-Term Prospects

500510: Future Infrastructure Orders And Sustainability Initiatives Will Drive Measured Sector Gains

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500510
AnalystConsensusTarget
Not Invested
Published 07 Nov 2024

Update shared on 13 Dec 2025

Fair value Increased 1.32%
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Analysts have modestly raised their fair value estimate for Larsen & Toubro from ₹4,399.97 to ₹4,457.87. This reflects slightly higher confidence in its future earnings multiple and profit margins, despite broadly unchanged growth and discount rate assumptions.

What's in the News

  • The Indian Army has awarded Larsen & Toubro a major contract to indigenously produce BvS10 Sindhu all terrain vehicles with support from BAE Systems, strengthening defence mobility and domestic manufacturing.
  • L&T and General Atomics Aeronautical Systems have formed a strategic partnership to manufacture combat proven Medium Altitude Long Endurance remotely piloted aircraft systems in India for upcoming defence tenders.
  • L&T Energy Hydrocarbon Onshore has secured an ultra mega order to build a Natural Gas Liquids plant in the Middle East as the lead EPC partner in a consortium with Consolidated Contractors Group.
  • The Offshore Wind Business of L&T has been nominated by TenneT, in collaboration with Hitachi Energy, to deliver HVDC converter stations for large scale North Sea wind integration into the German and Dutch grids.
  • L&T has signed a Sustainability Linked Trade Facility of USD 700 million with Standard Chartered, tying financing costs to greenhouse gas emission intensity and freshwater withdrawal performance metrics.

Valuation Changes

  • The Fair Value Estimate has risen slightly from ₹4,399.97 to ₹4,457.87 per share, reflecting a modest uplift in expected long term fundamentals.
  • The Discount Rate has increased marginally from 16.08 percent to 16.11 percent, indicating a slightly higher required return on equity.
  • The Revenue Growth assumption is unchanged at 15.01 percent, implying a stable outlook for top line expansion.
  • The Net Profit Margin forecast is unchanged at 6.98 percent, indicating a steady view on expected profitability.
  • The Future P/E multiple has risen slightly from 32.41x to 32.85x, suggesting a modestly higher valuation multiple applied to forward earnings.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.