LT

LT’s annual report of 2025 highlighted its consistent focus on diversifying revenue streams, exploring new opportunities and enhancing return profile. We expect LT to benefit from the strong international prospect pipeline, a low base of domestic ordering last year, an improved RoE profile, and better capital allocation over the past few years. The company’s near-term ordering may be affected by the Israel-Iran conflict in the Middle East and fluctuating oil prices, but the long-term support comes from 1) a strong order book sustaining healthy revenue growth, 2) fairly stable working capital driving improvement in return ratios, and 3) margin improvement. We incorporate details of the annual report and roll forward our valuations to Jun’27 to arrive at a revised TP of INR4,100, based on 28x Jun’27E earnings for core business and a 25% holding company discount to subsidiaries. Maintain BUY. At the current price, LT is trading at 30x/25x P/E for FY26/27E for core EPC business. We incorporate annual report details and roll forward our valuations to Jun’27 to arrive at a revised TP of INR4,100, based on 28x Jun’27E earnings for core business and a 25% holding company discount to subsidiaries.