On Thursday, Goldman Sachs reaffirmed its Buy rating on Larsen & Toubro Ltd. (LT:IN) (OTC: LTOUF) stock, maintaining a price target of INR3,700.00. The firm's analysis highlighted that Larsen & Toubro's international business played a significant role in the company's performance during an election-affected quarter.
The analyst from Goldman Sachs projected that from the second quarter onward, the company is expected to witness growth in domestic orders and execution. This outlook aligns with the focus on capital expenditure emphasized in the recently announced budget. However, the firm anticipates limited potential for an upward revision in order inflows based on this budget.
The report further noted that profit margins will be an important aspect to monitor, especially considering the company's modest guidance for the fiscal year 2025. With domestic projects expected to contribute more significantly in the future, their impact on margins is to be closely observed.
Larsen & Toubro is positioned as a prime beneficiary of domestic infrastructure and international hydrocarbon capital expenditures, which are anticipated to drive robust earnings growth in the near term. The Buy rating and twelve-month price target of INR3,700 remain unchanged according to Goldman Sachs' assessment.
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