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Informist, Tuesday, May 5, 2026

By Astha Oriel and Rajesh Gajra 

NEW DELHI/MUMBAI — All project sites of Larsen & Toubro Ltd. are functioning as of date and the company's employees are safe amid the military conflict in West Asia, the management said in an analyst call after the announcement of earnings for the March quarter and financial year 2025-26 (Apr-Mar). 

"The Middle East remains a statistically significant market for Larsen & Toubro, and as of Mar. 31, 2026, we have an order book of almost INR 3 trillion coming from the region. While we do anticipate some near-term impact on execution primarily due to supply chain constraints, we are working closely with our clients on alternate routes and logistic arrangements to ensure minimal disruption," the management said. 

Despite the ongoing crisis, the company has not seen any project cancellations in West Asia, and the payments from clients continue to be received as per schedule, the management said. "While we did observe some delay in timelines in project awards during the period when the conflict was most active, the bidding activity since then has resumed, and we do not foresee cancellations of projects in which we are actively participating," the management added.

Amidst the West Asia crisis, the company sees supply chain issue to be the biggest risk. The supply chain risk is bigger than inflation risk, according to the company. 

The management said the most significant impact for the company has been in logistics and insurance, which have increased materially amid the West Asia crisis. The company is engaging in active discussions with the clients to seek appropriate relief for such costs, the management added. 

Despite the ongoing military conflict in West Asia, the company sees no major extension in project duration in the region where it majorly operates in the hydrocarbon offshore and renewable energy segment, according to the management. The company has a track record of finishing renewable energy projects at least 2-3 months ahead of time, the management added. "Even if you assume that these 2-3 months are lost because of this disruption, we will still be able to finish the projects on time if not earlier," a company official said. 

For FY27, the company expects June quarter and September quarter to be softer in terms of project execution momentum due to the West Asia military conflict. For the March quarter of FY26, the project execution was hit due to supply chain disruptions.

On its data centre business, the management of L&T said the total capacity was currently 30 megawatt and the initial aim is to raise it to 200 MW "over time." The objective is to scale the business via hyper-scale alliances, AI-driven infrastructure and sovereign private cloud offerings, a senior company official said.

The official said the company aims to invest around INR 100 billion in the data centre business. "We are currently evaluating multiple business and partition models. Accordingly, the pace and scale of investments may change depending on the final structure adopted," he said.

The management said the company wants to "make sure our data centre is AI enabled, which means that we will have servers and GPUs which will enable high computing to be done and for which obviously global hyperscalers will be one client set but there are also quantum computing organisations which will be another client set."

L&T is currently "trying to curate the market, develop supply chain and also create facility from the ground up," the management said with respect to its data centre business investments. It expects the full benefit of these investments to come during the FY31-36 plan period of the company.

L&T is also restructuring its realty business. The management said it is allocating almost INR 42 billion, "primarily to fund development of commercial real estate." "In addition, the parent will provide near-term support for land acquisition for upcoming residential or mixed-use projects", it said. Thereafter, the company may explore external fundraising options, including debt and/or equity.

In residential realty, L&T will not get into mid-size housing complexes, the management said. The company will get into large residential projects. "And within that we will try to get into township kind of situations rather than single buildings," a senior company official said.

For the March quarter, L&T's consolidated net profit was INR 53.26 billion, up 66% on quarter but down 3% on year, and lower than the analysts' estimate of INR 55.23 billion. The company's revenues during the quarter rose 11% on year and 16% on quarter to INR 827.62 billion, but was below the Street estimate of INR 828.66 billion. Tuesday, the company's shares closed at INR 4,054.50 on the National Stock Exchange, down 1.1% from the previous close.  End

Edited by Deepshikha Bhardwaj

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