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Informist, Saturday, May 2, 2026

 

By Astha Oriel

 

NEW DELHI – Capital goods major Larsen & Toubro Ltd. is expected to report a moderate year-on-year increase in its consolidated top line and bottom line for the March quarter, driven by healthy execution of its robust order book, according to analysts. The West Asia crisis, however, is expected to weigh on the company's operating margin for its core engineering and construction business due to disruption in order execution, analysts said. 

 

The company's consolidated net profit, excluding exceptional items, is seen at INR 55.65 billion, up nearly 11% on year and 22% on quarter, according to the average of estimates from nine brokerages. Kotak Securities Ltd. has the highest estimate for net profit at INR 60.27 billion, while the lowest estimate is INR 45.50 billion by Elara Securities (India) Pvt. Ltd. This could mark the 17th consecutive quarter of year-on-year growth in the company's net profit. The company will announce its March quarter earnings on Tuesday.

 

The company's consolidated revenue is expected to rise nearly 12% on year and more than 16% on quarter to INR 831.90 billion, according to the average of brokerages' estimates. Motilal Oswal Financial Services Ltd. has the highest estimate for net sales at INR 872.52 billion, and JM Financial Institutional Securities Pvt. Ltd. has the lowest estimate at INR 796.19 billion. This is likely to be the 21st consecutive quarter of revenue growth. 

 

Motilal Oswal Financial Services expects revenue from the company's core engineering and construction business to grow 19% on year, and Nomura Equity Research pegs it at 16%. Revenue of the services business is expected to grow 13% on year, according to Nomura. Prabhudas Lilladher Pvt. Ltd. Projects growth in the company's plant and machinery vertical at more than 8.4% on year, despite the West Asia crisis. 

 

In its core projects and manufacturing business, the engineering behemoth operates in three key segments–infrastructure projects, energy projects, and hi-tech manufacturing. The infrastructure projects segment accounted for around 47% of the company's revenue in the December quarter. The energy projects accounted for nearly 18%, while hi-tech manufacturing accounted for about 5% of the company's revenue for the December quarter.  

 

As of Dec. 31, 2025, the company's consolidated order book was INR 7.3 trillion, with orders from West Asia accounting for nearly 37% of the order book. Nuvama Wealth Management expects robust execution of the order book in the March quarter to support the company's 15% on-year revenue growth guidance for 2025-26 (Apr-Mar). "Execution could also receive support from a renewed thrust in the water segment after the announcement of Jal Jeevan Mission 2.0," the brokerage said. 

 

Nuvama, however, flagged potential softness in the execution of the order book due to natural gas shortages owing to the West Asia crisis. "Even so, L&T is expected to deliver robust core operating profit margins, supported by strong execution in its seasonally strongest quarter and better fixed-cost absorption," the brokerage said. 

 

Nomura expects the company's order inflows for the March quarter to decline sharply to INR 605 billion from INR 896.1 billion a year ago on account of an unfavourable base and the lack of any ultra-mega orders. Prabhudas Lilladher expects the domestic order inflows to remain steady in the quarter, while international inflows may slow down after February 2026, owing to the West Asia situation. 

 

The company's earnings before interest, tax, depreciation, and amortisation, or EBITDA, are expected at INR 88.80 billion, up more than 8% on year, according to the average of nine brokerages' estimates. Nuvama Wealth Management has the highest estimate at INR 93.81 billion, while the lowest EBITDA estimate is INR 80.40 billion by Elara Securities (India) Pvt. Ltd.  

 

The company's EBITDA margin is expected to decline 10 basis points-140 basis points from 11% a year ago, according to four brokerages. Analysts said the modest impact of slower execution and the sustenance of cost-overruns in the hydrocarbon segment, as well as current operational disruption at some locations in West Asia, will weigh on margins. 

 

The company's financial services subsidiary, L&T Finance Ltd., posted a consolidated net profit of INR 8.07 billion for the March quarter, on a revenue of INR 47.71 billion. L&T has a 66% stake in L&T Finance. Its technology services arm, LTM Ltd., previously known as LTI Mindtree Ltd., posted a consolidated net profit of INR 13.92 billion on a revenue of INR 112.92 billion in Jan-Mar. Another arm, L&T Technology Services Ltd., reported a consolidated net profit of INR 3.32 billion on a revenue of INR 28.58 billion in Jan-Mar.

 

For FY26, the company's consolidated net profit is expected at INR 170 billion-INR 175.39 billion, according to the average of estimates from three brokerages. The company's revenues are expected at INR 2.83 trillion-INR 2.91 trillion, the estimates showed. Larsen & Toubro's EBITDA is seen at INR 293.59 billion-INR 297 billion. Prabhudas Lilladher said it has cut its earnings per share estimates for FY26 by 7%, "factoring in slower execution in the Middle East and delays in order inflows amid geopolitical tensions, which are expected to impact overall revenue visibility and execution momentum."

 

Analysts will track the management's commentary on the impact of the West Asia conflict on the company, its order pipeline, execution plans, and updates on the divestment of Nabha Power Ltd. and phase-1 of the Hyderabad Metro rail project. Earlier in April, the Competition Commission of India had approved the acquisition of Nabha Power, a step-down subsidiary of L&T, by Torrent Power Ltd. In February, both the companies had said that L&T would divest 100% equity and convertible instruments in Nabha Power to Torrent Power for around INR 37 billion.

 

Shares of L&T closed 2% higher at INR 4,014 on the National Stock Exchange on Thursday. The stock has risen 2% since the company reported its December quarter results on Jan. 28. 

 

All 13 brokerage reports on the company available with Informist have a 'buy' recommendation on the stock, with an average target price of INR 4,604. This is nearly 14% higher than the current share price. 

 

Following are the March quarter earnings estimates for Larsen & Toubro Ltd., from 9 brokerages in descending order of the estimate of net profit in INR billion:   

 

BROKERAGES	Net Sales	Net Profit	EBITDA
Kotak Securities Ltd.	832.52	60.27	91.15
Emkay Global Financial Services Ltd.	848.73	60.20	91.65
Nuvama Wealth Management Ltd.	822.91	59.32	93.81
HDFC Securities Ltd.	833.20	57.70	88.20
JM Financial Institutional Securities Pvt. Ltd.	796.19	55.68	84.91
Nomura Equity Research	857.97	54.49	89.72
Prabhudas Lilladher Pvt. Ltd.	808.69	54.35	88.18
Motilal Oswal Financial Services Ltd.	872.52	53.37	91.21
Elara Securities (India) Pvt .Ltd.	814.40	45.50	80.40
Average	831.90	55.65	88.80

 

End

 

Edited by Tanima Banerjee

 

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