This article first appeared on GuruFocus .
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Order Inflows:INR1,158 billion, up 45% YoY.
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Order Book:INR6.67 trillion, up 31% YoY.
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Group Revenue:INR680 billion, up 10% YoY.
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Projects & Manufacturing Revenue:INR490 billion, up 10% YoY.
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EBITDA Margin:10%, down from 10.3% YoY.
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Projects & Manufacturing EBITDA Margin:Improved to 7.8% from 7.6% YoY.
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Consolidated PAT:INR39 billion, up 16% YoY.
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Net Working Capital to Revenue Ratio:Improved to 10.2% from 12.2% YoY.
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Return on Equity (ROE):17.2%, up 110 basis points YoY.
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Energy Projects Revenue:INR131 billion, up 48% YoY.
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Infrastructure Segment Revenue:Declined by 1% YoY.
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Hi-Tech Manufacturing Revenue:Approximately INR28 billion, up 33% YoY.
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IT and Technology Services Revenue:INR133 billion, up 13% YoY.
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Development Projects - Hyderabad Metro Loss:INR1.75 billion, reduced from INR2.07 billion YoY.
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Cash Flow from Operations (excluding Financial Services):INR106 billion, up from INR61 billion YoY.
Release Date: October 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Larsen & Toubro Ltd ( LTOUF ) reported a 45% YoY growth in order inflows for Q2 FY26, driven by strong activity in India and the Middle East.
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The company's order book expanded to INR6.67 trillion, reflecting a 31% YoY increase, providing strong revenue visibility.
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Group revenues grew by 10% YoY in Q2 FY26, with the Projects & Manufacturing portfolio margin improving from 7.6% to 7.8%.
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Larsen & Toubro Ltd ( LTOUF ) secured ultra mega orders in the Middle East for its hydrocarbon business, enhancing its international presence.
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The company entered strategic partnerships in renewables, defense, and semiconductors, strengthening its future growth foundation.
Negative Points
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The EBITDA margin for Q2 FY26 declined to 10% from 10.3% in the previous year, primarily due to margin compression in the IT&TS segment.
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Execution in the Infrastructure Projects segment was subdued, attributed to an extended monsoon season and slower progress in rural water supply projects.
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The Energy segment margin declined from 8.9% to 7.3% due to cost overruns in some domestic and international projects.
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The Hyderabad Metro posted a loss of INR1.75 billion in Q2 FY26, although it was an improvement from the previous year's loss.
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The company faces challenges in the water segment due to payment issues, leading to slowed execution and impacting working capital.
Q & A Highlights
Q: Can you provide insights into the prospect pipeline and sustainability of large projects in Kuwait? A: Subramanian Sarma, Senior Executive Vice President - Energy, stated that L&T holds an L1 position on three bids in Kuwait, totaling approximately $4.5 billion. The company is optimistic about securing additional funding for these projects, with expectations for completion by the next quarter. The overall pipeline in the Middle East, including Saudi Arabia, Qatar, and UAE, remains strong.
Q: With the rising order book in the Middle East, what are the execution challenges and profitability concerns? A: Subramanian Sarma assured that L&T has a robust risk management system to handle order book exposure. The company has strategic partnerships to mitigate supply chain and logistics constraints, ensuring smooth execution and maintaining profitability.
Q: Could you elaborate on L&T's interest in electronic manufacturing services (EMS) and potential investments? A: Parameswaran Ramakrishnan, Executive Vice President, Investor Relations, mentioned that L&T is exploring options to expand its electronics portfolio as part of its Lakshya L31 strategy. Details on investments and specific areas of focus will be shared after the financial results in May 2026.
Q: Regarding the Infrastructure segment, is the margin expansion sustainable, and how does the private sector's involvement affect margins? A: Parameswaran Ramakrishnan explained that infrastructure margins have improved due to execution efficiencies. The increased share of private sector orders, driven by real estate and carbon-light projects, could lead to faster execution and potentially better working capital management.
Q: What is the status of the Hyderabad Metro project, and how will it impact L&T's financials? A: Parameswaran Ramakrishnan stated that L&T's investment in Hyderabad Metro is valued at INR70 billion, with an impairment charge taken to reflect a realizable value of INR20 billion. The government of Telangana will take over the debt and equity, potentially resulting in a marginal credit in L&T's consolidated financial statements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
