Larsen & Toubro Stock Earnings Reports

Key points for investors:

- Strong order momentum: Q2 order inflows grew 45% YoY to INR 1,158 billion; order book expanded to INR 6.67 trillion (up 31% YoY) providing multi-year revenue visibility. Management expects to exceed its FY26 order inflow guidance (10% growth).

- Revenue and profitability: Group revenues rose 10% YoY in Q2 to INR 680 billion; consolidated PAT was INR 39 billion (+16% YoY). Group EBITDA (ex-other income) was 10% in Q2 (slight YoY dip driven by IT & TS); Projects & Manufacturing (P&M) EBITDA improved to 7.8% (Q2 FY25: 7.6%). Management maintains FY26 revenue growth guidance of 15% and P&M full-year EBITDA margin target of 8.5%.

- Segment dynamics: Energy (hydrocarbon) posted strong order inflows and 48% revenue growth but saw margin pressure due to cost overruns on some finishing projects; management expects softness to persist near term but has factored this into FY26 guidance. Infrastructure revenues were slightly down (extended monsoon, slower water project execution) but infra EBITDA improved to 6.3% and H2 execution is expected to pick up. Hi‑Tech Manufacturing, IT & Technology Services and Others showed mixed but improving trends.

- Geographic mix & opportunities: International revenues were ~56% of Q2 revenues; international order book is heavily Middle East‑weighted (~84% of international book). Management highlighted multiple large Middle East wins (including ultra‑mega onshore and offshore hydrocarbon packages) and a robust prospect pipeline (total ~INR 10.4 trillion). Renewables, green ammonia, semiconductors and defence partnerships expand future growth avenues.

- Strategic items & balance sheet: In‑principle agreement for Telangana government to take over Hyderabad Metro SPV (management expects transaction by end FY26); L&T has restated standalone Metro investment to ~INR 20 billion and taken an impairment in Q2. Secured a USD 700 million sustainability‑linked trade finance facility. Net working capital improved to 10.2% of revenue (down ~200 bps YoY) and trailing 12‑month ROE rose to 17.2%.

- Risks & near‑term headwinds: Cost overruns in certain hydrocarbon projects (in final stages) and sector‑specific execution slowdowns (water/Jal Jeevan projects, seasonal monsoon impact) may keep near‑term margins under pressure. Management emphasizes disciplined bidding, risk mitigation and back‑to‑back contractual protections for commodity/supply risks.