L&T Stock (L&T) Declines 4% After Q4 Earnings: Expert Analysis on Whether to Buy, Sell, or Hold

• Larsen & Toubro (L&T) share price slipped more than 5% post Q4 results, making it the largest loser among the Nifty-50 stocks.
• The company reported a 10.3% increase in net profit and a 15% increase in revenue from operations compared to the same period last year.
• Analysts’ views on the company’s future prospects remain positive despite lower than expected margin guidance for FY25.

Following the release of Q4 results, Larsen & Toubro’s share price takes a hit, but analysts maintain a positive long-term outlook.

L&T’s Q4 Results and Market Reaction

Larsen & Toubro (L&T) share price remained in focus on Thursday post Q4 Results. The share price slipped more than 5% in the opening trades and was trading 3-4% lower thereafter. Despite reporting a 10.3% increase in net profit and a 15% increase in revenue from operations compared to the same period last year, L&T’s share price was the largest loser among the Nifty-50 stocks.

Strong Order Book and Margin Guidance

As of March 31, 2024, the group’s consolidated order book stood at ₹475,809 crore, representing a 20% increase from the previous year. However, the company’s future margin guidance was reduced to 8.2-8.3% for FY25, taking into account supply chain disruptions, an uncertain political environment, and ongoing conflicts. This has led to subdued expectations of significant margin improvement.

Analysts’ Views and Recommendations

Despite the lower margin guidance, analysts remain positive on the long-term prospects of L&T. Motilal Oswal Financial Services has revised its target price to ₹4,000 and reiterated their BUY rating on L&T. Jefferies India Pvt Ltd also maintains a Buy rating on L&T with a revised target price of ₹3,970. Antique Stock Broking also maintains a Buy rating on the stock with a revised SOTP (Sum of the parts) target of ₹3,933.

Conclusion

While L&T’s share price took a hit following the release of Q4 results, analysts maintain a positive long-term outlook for the company. Despite lower margin guidance for FY25, the company’s strong order book and the improving prospect pipeline are seen as promising indicators for future growth.