India's L&T jumps as quarterly profit beat eases Middle East concerns

Oct 28 (Reuters) - Shares of India's Larsen & Toubro rose more than 6% in early trading on Wednesday after the engineering conglomerate posted a 33% jump in second-quarter profit, driven by strong order inflows and easing concerns over Middle East project execution.

The stock was up 4.38% at 3,826.10 rupees, as of 9:35 a.m. IST.

L&T, seen as a barometer for India's infrastructure sector, reported a profit of 52.02 billion rupees ($546.92 million) in July-September on Tuesday, while revenue rose 16% to 787.5 billion rupees.

Order inflows rose 28% to 1.48 trillion rupees in the reported quarter, taking the company's outstanding order book to a record 8.54 trillion rupees. International orders accounted for 63% of new orders.

J.P. Morgan said L&T's strong execution, despite the ongoing Middle East conflict, eased concerns about its ability to meet annual growth targets, noting that projects in the region continued despite logistical challenges.

The brokerage maintained its "Overweight" rating but lowered its price target to 4,960 rupees from 5,060 rupees, citing higher logistics costs affecting solar projects in the Middle East.

Investec raised its profit estimates for fiscal 2027 through 2029 by 3%-4% on stronger-than-expected revenue growth, healthy order inflows and improved working capital. It maintained its "Buy" rating and raised its price target to 5,000 rupees from 4,870 rupees.

Jefferies also maintained its "Buy" rating, citing L&T's strong order book and execution, but cut its price target to 4,700 rupees from 5,000 rupees to account for weaker engineering and construction margins.

L&T maintained its fiscal 2027 guidance for revenue and order inflow growth of 10%-12% each, despite geopolitical tensions affecting some projects in the Middle East.

($1 = 95.1150 Indian rupees)