L&T shares rally 6% after Q2 net profit jumps 33% YoY. Why Jefferies cut target price?

ETMarkets.com

The stock rose to Rs 3,894 on the NSE, emerging as the top gainer on the Sensex and Nifty amid broader market weakness. It is on track for its biggest single-day gain in more than six months.

Also read | Larsen & Toubro Q2 Results: Profit surges 33% YoY to Rs 5,202 crore, revenue grows 16%

The engineering and construction major’s revenue from operations rose to Rs 78,750 crore for the second quarter of FY27, recording a 16% YoY growth from Rs 67,984 crore in the year-ago period. The company's earnings before interest, taxes, depreciation and amortisation (EBITDA) rose around 0.6% YoY to Rs 6,845 crore in Q2 FY27, compared with Rs 6,806 crore in the corresponding quarter last year.

Why Jefferies reduced target price for L&T

Jefferies maintained its ‘Buy’ rating on the shares of L&T but reduced its target price to Rs 4,700 apiece from Rs 5,000 apiece. The latest target price implies more than 28% upside potential from the stock’s previous closing price.

The international brokerage said the company’s Q2 EBITDA was 5% lower than expectations, as 7.2% E&C margin was weak at 56 bps lower YoY. The company’s 22% YoY rise in the H1 FY27 order flow is tracking ahead of L&T’s annual 10-12% YoY guidance, it said, adding that management maintained its FY27 E&C margin estimate and 10-12% YoY revenue growth guidance.

“We have factored in lower margins given the H1 performance. L&T has outperformed Nifty by 2-6% YTD and over 1 year, which we believe should continue given strong order book and execution,” Jefferies further said.

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L&T share price

L&T shares have gained over 5% in a week and 1.5% in a month but remain down 8% in 2026 so far. The stock has declined 4% over the past year.

Over the longer term, the shares have risen 32% in three years and 111% in five years.