L&T shares fall after second price target cut in two days due to West Asia crisis Shares of Larsen and Toubro (L&T) Ltd. dropped nearly 3% on Thursday, March 12, following a second price target cut in two days. The decline came amid concerns over the ongoing West Asia crisis, which has disrupted business operations and investor sentiment. Despite the drop, the stock showed signs of recovery later in the trading session. Brokerage firm Kotak Institutional Equities revised its price target for L&T shares to ₹4,000 per share from ₹4,350, maintaining a 'buy' rating. The revised target suggests a potential 4% upside from the stock’s previous closing price. This follows a similar cut by UBS, which reduced its target price by nearly 8% earlier in the week. Both adjustments reflect growing caution among analysts about the company’s exposure to regional instability. L&T has remained a focal point for investors and analysts since the Iran-Israel-US conflict escalated on February 28. The company’s significant business presence in West Asia has made it vulnerable to disruptions caused by the crisis. According to JM Financial, L&T’s order book exposure to the region stands at 37%, with 33% of its order inflows coming from the first nine months of the current fiscal year. This highlights the company’s reliance on West Asian markets for revenue. Kotak Institutional Equities warned that the crisis could strain L&T’s near-term financials through multiple channels, including delayed projects and reduced customer spending. The firm noted that the long-term impact of the conflict on regional spending patterns remains uncertain, making it difficult to predict the extent of the company’s challenges.#ubs #west_asia_crisis #kotak_institutional_equities #larsen_and_toubro #iran_israel_us_conflict
Larsen and Toubro Shares Drop Amid Regional Conflict and Market Concerns Shares of Larsen and Toubro (L&T) Ltd. have fallen nearly 10% over two trading sessions following the US and Israel’s attack on Iran and Iran’s subsequent retaliatory strikes across Gulf nations. The conflict has raised concerns about the company’s exposure to the region, which is a significant portion of its business. Analysts and investors are closely monitoring the situation, as L&T’s operations and financial performance are heavily tied to the Middle East. L&T’s order book, which includes its IT subsidiaries, stands at 7.3 lakh crore. A substantial share of this comes from the West Asia region, currently at the center of the escalating tensions. As of the first nine months of the current financial year, 37% of the company’s order book is tied to the Middle East. This region accounts for 33% of L&T’s order inflows during the same period, including Saudi Arabia and the UAE. The company has strategically increased its presence in the Gulf over recent years, capitalizing on the expansion plans of Gulf nations, such as new fuel refineries and infrastructure projects. However, the ongoing conflict poses significant risks to L&T’s operations. The company’s integrated supply chain relies heavily on goods and materials sourced from India, making supply chain disruptions a critical vulnerability. Macquarie analysts highlighted that 55% of L&T’s Gulf order book is based on fixed-price contracts. With the war escalating, rising costs—such as higher crude prices, freight rates, and insurance expenses for logistics—could erode margins and complicate project execution. Another major concern is the potential physical damage to L&T’s infrastructure in Gulf countries.#us #iran #middle_east #gulf_nations #larsen_and_toubro
