L&T plunges nearly 7% as Q3 results miss estimates; should you hold the stock?

L&T share price today, L&T Q3 result 2024, L&T share price target 2024: Larsen & Toubro's (L&T) shares took a heavy beating and emerged as the top Nifty50 loser in opening deals on Wednesday, January 31, after the infrastructure conglomerate's net profit for the third quarter of the ongoing fiscal (Q3 FY24) fell short of analysts' estimates. The stock fell nearly seven per cent to Rs 3,387.05 on the NSE in the morning trade.

After market hours on Tuesday, L&T reported a consolidated net profit of Rs 2,947 crore for the October–December period, an increase of 15.4 per cent compared to the corresponding period a year ago.

L&T registered revenue of Rs 55,128 crore for the quarter ended December 31, 2023, as against Rs 46,390 crore logged in the year-ago period, according to a regulatory filing.

Its quarterly margin came in at 10.4 per cent, as against 10.9 per cent a year ago. The company posted Rs 5,759 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the fiscal third quarter, up 13.5 per cent on a year-on-year (YoY) basis.

Zee Business analysts had estimated L&T's quarterly net profit at Rs 3,400 crore, revenue at Rs 54,100 crore, EBITDA at Rs 6,175 crore, and margin at 11.4 per cent. Read more

L&T share price target: What's in for investors? Here is what brokerages suggest:

Post the Q3 announcement, CLSA, Citi, Jefferies, and Goldman Sachs each maintained a 'buy' call on L&T shares with a target of Rs 4,260, Rs 4,082, Rs 4,135 and Rs 3,760, respectively. In addition, Morgan Stanley has maintained an 'overweight' rating on the counter with a target price of Rs 4,171.

Mentioning that execution remains strong, Morgan Stanley said in its note, "Ordering activity may see some slowdown due to the election; however, prospects remain strong. Core margin guidance was lowered due to timing differences (faster completion of legacy jobs and slower ramp-up of new jobs)."

According to Citi, L&T remains well-placed to benefit from growth in capex in India and the Middle East. The counter remains the top pick from a medium-term perspective.

L&T's order inflows and execution remain healthy, whereas Q3 margins were inline but muted. "Margins are likely to improve over the medium term," Citi said in its note. As per CLSA, L&T has an improving outlook, with its US$75 billion pipeline up 29 per cent YoY and a spike in ME capex.

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