Larsen & Toubro (L&T) shares have reached a new record high, surging 2% following the release of its Q2 results. Motilal Oswal Financial Services (MOFSL) has responded by increasing its target price for the stock, signaling confidence in the company's growth potential.

For the second quarter of FY26, L&T reported a 15.6% year-on-year (YoY) rise in net profit, reaching ₹3,926 crore, driven by higher revenue. Revenue from operations also saw a 10.4% increase, climbing to ₹67,984 crore. However, the company's revenue fell slightly short of street estimates by 4% due to extended monsoon-related execution delays. Other income jumped 25.7% to ₹1,384.28 crore. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at ₹6,806 crore, a 7% YoY increase, though the EBITDA margin experienced a slight decline from 10.3% to 10%.

Despite the minor setback in revenue estimates, L&T demonstrated strong order inflows during the quarter, securing new orders worth ₹1.15 lakh crore, marking a substantial 45% YoY increase. This surge reflects the company's robust performance across a broad spectrum of its businesses. As of the end of September 2025, the company's consolidated order book reached ₹6.67 trillion, a 30.7% YoY increase, with international orders accounting for approximately 49% of the total.

Several brokerage firms have maintained a positive outlook on L&T following the Q2 results. MOFSL has retained its "Buy" rating on L&T shares, revising the target price upward to ₹4,500 from ₹4,300. Nuvama Institutional Equities has also maintained a "Buy" rating, increasing the target price to ₹4,680 from ₹4,200. Morgan Stanley has also maintained an "Overweight" rating on L&T, setting a target price of Rs 4,090 for the stock.

Analysts at Nuvama are optimistic about L&T, citing a consolidated order book at 3.6 times FY25 sales and a ₹10.4 trillion pipeline for the second half of FY26, up 29% YoY, largely driven by infrastructure and hydrocarbon projects. They have also revised their FY27E/28E EPS estimates upward and value the core business at 25x FY28E EPS.

MOFSL's analysts have also expressed confidence in L&T's growth, estimating a compounded annual growth rate (CAGR) of 16%, 18%, and 22% for core E&C revenue, EBITDA, and profit after tax, respectively.

L&T's Chief Managing Director, S N Subrahmanyan, commented on the company's ability to consistently secure large orders across multiple segments and geographies, reflecting its leadership position in the engineering, procurement, and construction (EPC) domain.

While brokerage firms are largely positive on L&T, MOFSL has cautioned that slower order inflows, delays in completing mega and ultra-mega projects, a sharp rise in commodity prices, increased working capital, and heightened competition could pose downside risks to their estimates.