L&T's stock has slipped for a fifth day as news emerges that Kuwait might cancel oil project tenders worth $8.7 bn, potentially affecting the engineering giant's future orders.
Background on Kuwait Tender Situation
Kuwait is reportedly reviewing several oil‑related contracts because the bids received were significantly higher than the budget. The total value of the projects under discussion is about $8.7 bn.
L&T's Position and Response
Analysts note that L&T was the lowest bidder for tenders exceeding $4.5 bn. However, L&T clarified that the projects mentioned in the media are not currently in its order book and it cannot comment on client decisions.
Analyst View and Stock Impact
- JM Financial expects L&T to still meet its FY26 order‑inflow growth target of 10% YoY, based on strong order intake of Rs 3.2 trillion for April‑December.
- To account for possible Kuwait delays, the brokerage reduced its core order‑inflow forecasts for FY26‑28 by 5‑6%.
- This adjustment translates to an estimated 3% drop in FY28 EBITDA, which was already factored into a modest 3% price dip projected for early 2026.
- The firm kept a “Buy” rating with a target price of Rs 4,500, implying roughly 16% upside from the recent close.
What This Means for Investors
L&T's shares are trading around Rs 3,864, down about 0.6% today and roughly 7% over the past five days. While the short‑term price pressure reflects the tender uncertainty, the longer‑term outlook remains positive thanks to a solid order pipeline and the company’s diversified portfolio.
Disclaimer
Remember, this is perspective, not a prediction. Do your own research and consider your risk tolerance before making any investment decisions.