This infra giant company set for a 25% rally? Goldman Sachs’ upgrade lifts price target; do you own?

L&T Share Price Today: Shares Engineering and construction giant Larsen & Toubro Ltd (L&T) edged higher on Friday, rising 1.76 per cent to Rs 4,074.50 on the NSE, after global brokerage Goldman Sachs upgraded the stock to buy from neutral. In a note released on December 12, the brokerage also raised its price target to Rs 5,000 from Rs 3,730, signalling a potential upside of nearly 25 per cent from Thursday’s close.

Goldman Sachs turns bullish on L&T

Goldman Sachs’ revised target is now the second highest on the street, just behind ICICI Direct’s Rs 5,020. The brokerage emphasised the fact that L&T’s strengthening position across new-age growth sectors, calling the future prospect “structurally improving”.

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Defence, green hydrogen, nuclear Power to drive growth

According to the note, L&T is well-placed to benefit from India’s accelerating push in defence production, green hydrogen transition, and the nuclear power expansion pipeline. These segments are expected to deliver sustained order inflows over the long term.

TAM to more than double by FY35

Goldman Sachs estimates L&T’s Total Addressable Market (TAM) will grow sharply—from Rs 1.4 lakh crore in FY26 to Rs 3.4 lakh crore by FY35—reflecting increased capital spending across core and emerging sectors.

Order book strength and capex recovery boost confidence

The brokerage cited L&T’s healthy order backlog and rising visibility on the domestic capex recovery as key reasons for its upgraded stance. These factors, it said, provide a strong foundation for multi-year earnings growth.

Revenue, profit to see strong multi-year CAGR

Goldman Sachs is expecting L&T’s revenue to grow at a low double-digit CAGR, while profit is expected to increase at a mid-teens CAGR over the next five years, driven by improving margins and steady execution.

L&T Q2FY26 results highlights

The company delivered a steady second-quarter performance, reporting a 16 per cent rise in consolidated net profit to Rs 3,926 crore for the quarter ended September 30, 2025. The company had posted a profit of Rs 3,395 crore in the same period a year earlier.

Revenue from operations climbed to Rs 67,984 crore, marking a 10 per cent growth year-on-year, aided by broad-based execution across its infrastructure and industrial segments. On Wednesday, shares of L&T closed 0.4 per cent lower at Rs 3,957 on the NSE.

L&T’s growth story this quarter was driven by a sharp 45 per cent increase in order inflows, which touched Rs 1,15,784 crore at the group level. The company secured large contracts across areas such as public infrastructure, data centres, commercial buildings, metro projects, hydropower, tunnels, renewables, and hydrocarbons, both in onshore and offshore segments.

International business continued to gain ground, with global orders contributing Rs 75,561 crore, or 65 per cent of the total inflow. The Middle East remained a key growth driver, supported by high capital expenditure in energy and infrastructure projects.

In the management commentary, L&T Chairman and Managing Director S. N. Subrahmanyan said the company’s results showcased its ability to execute well across multiple verticals despite major macroeconomic uncertainties. “Our capacity to repeatedly win large-scale projects across geographies underscores L&T’s leadership in the EPC domain,” he noted. “With healthy capex trends in India and the Middle East, we remain optimistic about our order prospects going forward.”