The brokerage said that while L&T’s exposure in the Middle East is skewed for priority segments, its non-energy infrastructure could be at risk. It also highlighted issues in domestic execution for the company.
UBS said L&T is better-placed than its global peers in the Middle East, with manpower being key.As a result of the emerging risks, L&T’s core order inflow is likely to grow at a Compounded Annual Growth Rate (CAGR) of 11% over financial year 2025-2028 compared to the earlier projection of 15%.
The company’s revenue and Earnings Before Interest, Tax, Depreciation and Amoritsation (EBITDA) can grow at a 13% CAGR and a 16.6% CAGR during the same timeframe, compared to the earlier projections of 15.3% and 20.2% respectively. All of these projections are assuming some near or medium-term risks.L&T has significant exposure to West Asia, which in the past two weeks has been at the receiving end of Iran’s attacks against the US and Israel . As much as 3.6 lakh crore or 49% of L&T’s consolidated order book was from its international business. Of this, more than 80% came from Saudi Arabia, UAE and the gulf region.
L&T has a 37% order book exposure to the Middle East and 33% to order inflows in the first nine months of the ongoing fiscal, as per brokerage JM Financial.
Of the 34 analysts who have coverage on the L&T stock, 28 have a ‘buy’ rating, four have a ‘hold’ rating and two have a ‘sell’ rating.
L&T shares ended the previous session 1% higher at ₹3,881.5 apiece. The stock has declined 6.9% in the past month but has gained nearly 10% in the last six months.
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