Larsen & Toubro (L&T) shares surged 3 per cent in early trade on Friday, leading the Nifty 50 pack, after global brokerage Goldman Sachs upgraded the stock to buy from neutral rating and raised its 12-month target price to ₹5,000 from ₹3,730.
The brokerage said its revised view reflects L&T’s strengthening growth visibility and an attractive risk-reward profile driven by its expanding capabilities and improving financial metrics.
Goldman Sachs noted that L&T is leveraging its execution strength and operational efficiency to unlock fresh opportunities that could lead to a re-rating. It highlighted the company’s strong order backlog, low working-capital requirements and better capital allocation as key drivers of projected earnings growth through FY26–28.
The brokerage added that margins are expected to improve further over the FY28–30 execution cycle, supported by growth in new strategic areas such as defence, green hydrogen and nuclear power. According to Goldman Sachs, these segments could rise to 15 per cent of order inflows by FY35, up from about 4 per cent currently.
The research note also expressed confidence in a domestic capex recovery and pointed to healthy order visibility across near-, medium- and long-term horizons. Over the next five years, Goldman Sachs expects L&T to compound revenue at a low double-digit rate and deliver mid-teen growth in profit after tax.
Investor sentiment turned upbeat following the upgrade, pushing L&T shares higher as the market reacted to the brokerage’s optimistic outlook.
It soared 3 per cent to ₹4,114 on the NSE in early trade. At 11.55 am, it traded at ₹4,076 against the previous close of ₹4,003.90.