JPMorgan has reiterated its bullish view on infrastructure major Larsen & Toubro (L&T), maintaining an 'Overweight' rating with a September 2027 target price of ₹5,060, implying an upside potential of nearly 30% from Monday's closing price. According to JPMorgan, the current valuation of L&T shares at less than 25x P/E is attractive and the stock remains its preferred pick. The brokerage believes that while the US-Iran war in the Middle East is an overhang on L&T shares, the business is being positioned for mid-teens growth with healthy RoE in traditional and emerging areas. JPMorgan noted that L&T's execution in the Middle East continues without any major disruptions and customers are by and large accommodating cost increases due to the impact of the conflict. During recent management interactions, L&T highlighted that public capex in India should pick up after a period of consolidation, while private corporate capex has picked up traction led by large order wins in the thermal power segment.
According to JPMorgan's Bansi Desai, hospital stocks are trading at 23-25 times forward EV/EBITDA, significantly above the sector's historical average of around 20 times EV/EBITDA. As reported by CNBC TV18, this premium valuation is supported by stronger growth, improved margins, and healthier balance sheets. Despite the elevated pricing, Desai expects hospital companies to continue compounding at high-teens to 20%-plus levels, unlike previous expansion cycles that saw aggressive capacity additions pressure profitability and balance sheets. The hospital sector is entering a significant capacity expansion phase, with listed hospital companies expected to add 30,000-40,000 beds over the next three to four years.
During recent management interactions, L&T outlined an ambitious strategic plan that envisages entry into new areas of data centres, green energy and electronic manufacturing, while aiming to double its defence revenues by 2031. According to JPMorgan's note, the company continues to focus on deepening its strong relationships with customers through this turbulent period. The brokerage emphasized that L&T maintains its focus on return on equity, cash flows and shareholder returns while pursuing these strategic initiatives. This strategic expansion aligns with the company's positioning for growth across traditional and emerging sectors.
According to CNBC TV18, only two other brokerages have target prices of ₹5,000 and above for L&T — Jefferies and ICICI Direct both have price targets of ₹5,000 apiece. A total of 32 analysts have coverage on L&T, with 26 having a 'buy' rating, five having a 'hold' rating and one having a 'sell' rating. Shares of L&T ended 0.7% lower on Tuesday at ₹3,877 and are down 6% so far this year. The stock's current valuation at less than 25x P/E continues to be viewed as attractive by multiple brokerages despite recent market volatility.
