Why L&T's Shares Are Tanking 5% Even As Profit Jumped 10% In Q4

Larsen & Toubro‘s share price was tanking on Thursday even as the company posted double-digit growth for the quarter ended March. The stock went down around over 5% to hit an intraday low of ₹3,290.

What Happened: The infrastructure giant reported a net profit of ₹4,396.12 crore for the quarter, marking a 10% increase from the ₹3,986 crore recorded in the same quarter last year. Revenue from operations grew by approximately 12% to reach ₹67,078.68 crore, compared to ₹58,335 crore in the March quarter of 2023.

Analyst Reactions: The slump today comes as several analysts cut their price target for the stock disappointed by the company’s margin guidance for the year ending March 2025. Brokerage firm CLSA maintained its “buy” rating on L&T but revised down its price target to ₹4,151 from ₹4,260. The brokerage said that the company’s order inflow guidance beat its estimates. The company has said that it expects to bag 10% more orders for the year ending March 2025, as compared to FY24.

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Bernstein retained its “outperform” rating on the stock with a price target of ₹3,800. The brokerage noted that L&T’s margin guidance for the new financial year was lower than anticipated but highlighted the company’s strong working capital position as a key highlight.

Jefferies also lowered its price target on L&T to ₹3,970 from ₹4,135 but maintained its “buy” rating. The global research firm said that the company’s revenue growth guidance appears low. The construction giant expects revenue to grow by around 15% for the year ending March 2025.

HDFC Securities also maintained its “buy” rating for the stock but cut the price target to ₹4,033 from ₹4,238. The domestic brokerage said that the company’s performance in the quarter was in line with estimates. The brokerage said that the company’s guidance on revenue and order inflow was ahead of its estimates but guidance on margin was lower. The company has guided the margin to be at 8.2%.

Price Action: L&T’s share price was down 3.49% to trade at ₹3,365.25 shortly after market open on Thursday.

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