The rebound got a reality check
Larsen & Toubro has been on a nice little comeback tour, but Nuvama just stepped in with the financial equivalent of a speed bump. The brokerage downgraded L&T to Hold and chopped its target price to Rs 4,400 from Rs 4,850, arguing the stock has already clawed back close to pre-conflict levels.
Why the broker is suddenly cooler
The big worry isn’t demand. It’s the plumbing. Nuvama says nearly 95% of L&T’s West Asia sites kept operating normally through March, but a prolonged closure of the Strait of Hormuz could still crank up logistics costs and create raw material headaches in the June quarter.
That’s the kind of thing investors hate because it’s not a dramatic one-day headline — it’s the slow-burn stuff that can mess with margins, schedules, and just about anyone’s patience.
What’s still working
To be fair, this isn’t a doom-and-gloom call. Nuvama is still modeling 18% core execution growth for Q4FY26 and 13% growth for FY26, and it thinks L&T is still trying to hit its 15% YoY revenue growth guidance.
But the brokerage also thinks the risk is shifting into Q1FY27, with inventories potentially thinning out and conflict escalation creating labor and supply-chain issues. In other words: the story is less “is L&T a good company?” and more “how long can the regional chaos keep poking the business in the ribs?”
Big picture
L&T is still a heavyweight with a constructive medium-term setup, but after the rebound, the market may not be willing to pay up for perfect execution if West Asia keeps acting like the world’s most inconvenient bottleneck.