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Informist, Tuesday, Jul. 28, 2026

 

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--L&T: Q1 operating environment anything but stable 
--CONTEXT: Comments by L&T's management in post earnings media call 
--L&T: Divestment of Hyderabad Metro business underway, may complete in Q2 
--L&T: Q1 international orders 56% of total order inflow 
--L&T: Q1 infra segment orders 41% of total order inflow 
--L&T: Q1 infra, utilities revenue dn YoY due to execution headwinds 
--L&T: Order pipeline in conventional energy segment encouraging 
--L&T: Realty growth business for co, reporting it as separate segment FY27 
--L&T: W Asia uncertainties not one-way street, seeing pockets of peace too 
--L&T: Seeing time delays in some project execution due to West Asia war 
--L&T: No problems with people commissioned for projects amid W Asia war 
--L&T: Disruptions more in supply chain vs people movement amid W Asia war 
--L&T: Jury still out if West Asia will be more peaceful or less in Q2 
--L&T: See very small revenue from electronics business in FY27 
--L&T: Over half of Q1 international order inflow from Europe 
--L&T: Other income up Q1 on treasury investment of temporary cash surplus 
--L&T: Q1 capex INR 3 bln vs INR 9 bln committed for it

 

NEW DELHI/MUMBAI – Larsen & Toubro Ltd. is seeing a delay in execution of some projects due to the war in West Asia, a senior company official told reporters Tuesday. 

 

"There, of course, have been time delays because some of the shipments of goods that were supposed to come in, because of the Strait of Hormuz was getting affected. They either had to take an alternate route, which made it time delayed and expensive, or had to wait for things to settle down. Now, this, of course, has pushed the timeline, and, the cost also will go up of project execution because of the extended state," President and Whole-Time Director (Finance) R. Shankar Raman said. 
                                                                                                      The company's consolidated order inflow for the June quarter was INR 1.08 trillion. About 56% of the order inflow was from the international markets. Of this, West Asia accounted for 20% of the order inflow, and the bulk came from Europe, Shankar Raman pointed out. "I think as far as Middle East uncertainty is concerned, it has not been just a one-way street in terms of everything coming to a halt and everything is in a destruction mode, etc. We've been having a very volatile situation where there have been pockets of peace, pockets of disturbance," the official said. 

 

The project progress has slowed down to the company's original plan, according to Shankar Raman. "We expected to be ahead of what we find ourselves in, but we have not had problems with people being commissioned there. Since March of this year, we have been able to win some projects and commission some projects, which means we have transferred people," he said, adding that the supply chain disruptions have been a little sharper than the movement of people.

 

However, Shankar Raman noted that revenue growth would have been much better had the supplies come in on schedule. "End of the day, I think we are living in a bit of a volatile world and I don't think, it's getting more and more hard to find an oasis where nothing disturbs any plans. So, I think we are also learning to live with this volatility," he said. 

 

According to Shankar Raman, jury is still out whether West Asia will be more peaceful or not in the September quarter.

 

"We do hope that sooner than later, some sense will prevail and stability will be restored. In fact, in one of our earlier calls.... we did mention that, as a company, we are considering a large presence in the Middle East (West Asia). We were anticipating a soft first two quarters and that is playing out almost similar to the extent that we anticipated," Shankar Raman said. 

 

The operating environment was anything but stable in the June quarter, according to Shankar Raman. For the June quarter, the company spent INR 3 billion in capex as against the committed INR 9 billion, Shankar Raman told Informist. 

 

The company completed the divestment of Nabha Power Ltd. to Torrent Power in the June quarter, according to Shankar Raman. The company has also signed a stock purchase agreement for the divestment of its stake in Hyderabad metro rail. "The process of completing the transaction is underway and expected to hopefully get completed during the course of the current quarter," Shankar Raman said. 

 

SEGMENTS

Among segments, the infrastructure business orders accounted for 41% of total order inflow in the June quarter. The customer revenues of infrastructure and utilities segments declined 3% on year due to execution headwinds, Shankar Raman said. The order pipeline in the conventional energy segment is encouraging, according to Shankar Raman. The segment's order book was INR 2.22 trillion as on Jun. 30. 

 

The company's order book from the real estate business was INR 173.30 billion. "We have carved out reality given our focus on real estate business and our own plans for its future. We have carved out reality from what originally was other segments and are from this year reporting reality as a separate segment," Shankar Raman said. 

 

For its electronics business, the company is setting up a facility, according to Shankar Raman. "We possibly will take about six, seven months for the facility to stabilise. I would expect FY27-28 (Apr-Mar) to have reasonable revenues in proportion to the size of the business reported," Shankar Raman said. 

 

The company's consolidated net profit jumped nearly 14% on year to INR 41.23 billion. Its revenue rose nearly 7% on year to INR 679.42 billion. The company's other income grew over 75% on year to INR 23.77 billion. "A combination of lower debt and higher investable surplus has managed us to earn good other income, largely treasury income," Shankar Raman said.    

 

The company's announced June quarter earnings post market hours. Tuesday, shares of the company closed 0.7% higher at INR 3,832 on the National Stock Exchange.  End 

 

Reported by Astha Oriel and Rajesh Gajra

Edited by Deepshikha Bhardwaj

 

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