L&T shares jump over 3% after healthy Q1 earnings growth; here’s what analysts predict for FY27

India’s largest civil construction company, Larsen & Toubro (L&T), shares surged more than 3% after the opening bell on Wednesday, July 29, as investors focused on the company’s healthy Q1 financial performance while concerns remain on the margin growth front.

A key focus of market investors was also on L&T’s order book growth and order inflow sectors, as the civil construction company secured orders worth over ₹1.08 lakh crore in the April to June quarter of the financial year 2026-27.

L&T shares rose 3.8% to hit their early market high level of ₹3,977.80 apiece on Wednesday’s market session, compared to ₹3,832 apiece at the previous equity market close, according to NSE data.

After touching the early market high, the company’s stock was trading 3.6% higher at ₹3,973 during the morning market hours on the stock exchange.

How did L&T perform in Q1 results?

Larsen & Toubro’s board of directors announced the company’s April to June quarter results for the financial year 2026-27 after the market hours on Tuesday, July 28, where the company recorded a 14% YoY growth in net profits.

NSE filings showed that L&T’s consolidated net profits witnessed a 14% rise to ₹4,122.85 crore in the first quarter of the current fiscal year, in comparison to ₹3,617.19 crore in the same quarter of the previous year.

However, on a sequential basis, the company’s net profits declined 22.5% to its June quarter levels, from ₹5,325.60 crore in the fourth quarter of the financial year 2025-26.

On the revenue front, L&T’s revenue from core operations advanced around 7% to ₹67,942 crore in the first quarter, from ₹63,679 crore in the same quarter of the previous financial year, as per the exchange filings.

Here’s what analysts predict

Analysts from leading investment firm Jefferies said that while the company management has maintained its annual 10-12% YoY revenue growth guidance, this shows that the company’s second half of the financial year is expected to be better in terms of performance.

However, the experts also flagged that these second half of the year expectations remain conditional on the US-Iran war settling down in West Asia.

“Management maintained its annual 10-12% YoY revenue guidance, implying that 2H will be better, but likely conditional on war settling down,” said the analysts.

Reviewing the Q1 performance, analysts from CLSA said that L&T surpassed expectations and guidance on new orders, recurring E&C margins and working capital, while the execution factor remained a miss.

“L&T has started execution of its exciting FY31 plan, touching all right chords of wealth creation, from building an AI business to expanding into electronic manufacturing, green tech & chemistry,” said CLSA analysts.

Margins remain a concern?

Analysts from Citibank said that L&T’s management commentary suggests supply chain-linked cost pressures, but it is expected to remain manageable in the upcoming period.

These cost pressures, in turn, weigh down the company's margins. Although L&T has maintained its full-year margin guidance, the execution in core segments of the business will remain a key focus of investors.

“Margin headwinds in Q1 were primarily driven by a bump in Expected Credit Loss,” said Citibank analysts.

NSE filings data showed that the company’s EBITDA (earnings before interest, tax, depreciation, and amortisation) margins contracted by 90 basis points to 9% in the June quarter, from 9.9% in the same period a year earlier.

The operation-level EBITDA also declined 3% to ₹6,318 crore in the first quarter, from ₹6,116 crore in the same period a year earlier.

What did the management say?

Amid the prevailing geopolitical uncertainties, the company management said that the domestic demand continues to remain healthy, with sustained expansion across both manufacturing and services activity.

While the risk of growth momentum interruption due to the supply chain disruption still looms over the company, the management is now focused on order book execution, maintaining financial discipline, and allocating capital judiciously across targeted growth sectors

“With a well-diversified portfolio spanning sectors and geographies, we remain confident of maintaining growth while capitalising on emerging opportunities,” said S N Subrahmanyan, Chairman and Managing Director of L&T, in an official statement.