L&T Adjusts Long-Term Targets Amid Market Challenges
L&T scales down 5-year targets
The Economic Times
Image: The Economic Times
Larsen and Toubro (L&T), India's largest engineering and construction firm, has revised its Lakshya Plan 2031 targets, aiming for a 10-12% compound annual growth rate (CAGR) in order inflows and 12-15% revenue growth over the next five years. The adjustments reflect a larger order book and uncertain conditions in the Middle East.
- 01L&T plans to invest ₹43,000 crore (approximately $5.2 billion USD) over the next five years.
- 02Revised targets include a CAGR of 10-12% in order inflows and 12-15% revenue growth.
- 03Return on equity (RoE) target is set at 16-17% by 2031.
- 04Previous targets included a 14% CAGR in order inflows and 15% revenue growth.
- 05Market conditions, particularly in the Middle East, influenced the decision to scale down targets.
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Larsen and Toubro (L&T), headquartered in Mumbai, India, has revised its long-term targets under the Lakshya Plan 2031 due to a substantial order book of ₹7 lakh crore (approximately $84 billion USD) and uncertain market conditions in the Middle East. In a recent earnings call, the company announced plans to invest ₹43,000 crore (approximately $5.2 billion USD) over the next five years. The new targets include a 10-12% CAGR in order inflows and 12-15% revenue growth, along with a return on equity (RoE) goal of 16-17% by 2031. This marks a decrease from the previous Lakshya 2021-2026 targets, which aimed for a 14% CAGR in order inflows, 15% revenue growth, and an RoE of 18%. Analysts at Nuvama Institutional Equities noted that the adjustments reflect the challenges posed by the current market landscape.
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The revised targets may affect L&T's future projects and employment opportunities in the construction sector, influencing job creation and economic growth.
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