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Informist, Tuesday, Jul. 28, 2026

 

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--L&T: Near-term may see logistical, trade disruptions in W Asia continuing
--CONTEXT: L&T management's comments in post-earnings concall with analysts
--L&T: Q1 order inflow helped by domestic pvt sector led investment
--L&T: Share of pvt sector orders in domestic order book up sharply YoY
--L&T: Of order prospects pipeline, transportation is 25%
--L&T: Of order prospects pipeline, building, factories is 15%
--L&T: Launched two realty projects in Mumbai metropolitan region in Q1
--L&T: Retaining FY27 revenue growth guidance of 10-12%
--L&T: Barring certain projects, execution momentum continued Q1 in W Asia
--L&T: Likely to announce some new order awards from West Asia soon
--L&T:Near term order prospects pipeline of INR 15 tln basis current pricing
--L&T: Elevated Q1 treasury income to stay for next 1-2 quarters
--L&T: Most of materials inventory in W Asia project sites consumed in Q1
--L&T: Share of pvt sector orders 45% of domestic order prospects pipeline
--L&T: Around 50% of order book is in fixed price orders
--L&T: No sharp rise in pvt sector share in domestic order prospects YoY
 

 

By Rajesh Gajra and Gunjan Rajput

 

MUMBAI/NEW DELHI – Larsen & Toubro Ltd. expects project awarding activity in West Asia to pick up in the September quarter after witnessing some slowdown in the June quarter. The company has not seen "any project cancellations across the opportunities that we are actively pursuing and bidding for" in that region,

management told investors and analysts at a post-earnings conference call Tuesday.

 

A senior official said disruptions to navigation, logistics, and trade caused by the lack of normalisation in shipping traffic through the Strait of Hormuz are likely to persist in the near term. Despite the challenging operating environment, the company is retaining its revenue growth guidance of 10-12% for 2026-27 (Apr-Mar) and a margin of around 7.8% with respect to the projects, products, and manufacturing portfolio, the management said. "Considering the rapidly evolving situation, we believe it is prudent to wait for greater clarity before reassessing the full-year outlook," the official said.  

 

Barring certain projects and sectors, the execution momentum of hydrocarbon projects in West Asia continued in the June quarter, according to the management. "But going forward, in segments like renewables, supply chain challenges have happened, and there are intermittent supply chain disruptions that are happening," a senior official said.

 

The management said at the beginning of the West Asia war, the company had around three months of inventory at its project sites there. "I think most of it has now been consumed as expected," a senior official said.

 

To handle the challenge, the company has "figured out alternative routes," he said. But this translates into higher costs and cost pass-through for the customers. If the customers are "willing to reimburse us the additional cost, then we bring the material. Otherwise, we are delaying the progress," the official said. 

 

A sharp surge in L&T's consolidated other income to INR 23.77 billion drove the company's bottom line growth during the quarter. "The other income is primarily on account of the higher cash generation that we have," a senior official said. The cash surplus, pending deployment into new investments when they shape up, generated a strong treasury yield during the quarter, he said.

 

This elevated level of other income, arising out of treasury investments, is likely to sustain for the next 1-2 quarters, according to the official. The company will invest the cash surplus in new or different businesses when the opportunities firm up fully, according to the management.

 

In its realty segment, L&T "further strengthened its presence in the NCR (National Capital Region) market through the acquisition of a 20-acre land parcel in Gurugram" in the June quarter, according to the official. The company launched two realty projects in the Mumbai metropolitan region.

 

On the order inflow for the June quarter, which rose 14% on year to INR 1.08 trillion, the official said "sustained private sector investment-led demand in the domestic market, particularly in the metals and minerals and the buildings and factories businesses," along with "strong international ordering activity, including large offshore wind (energy) awards in Europe," kept the momentum positive. The order inflow in the core projects, products, and manufacturing portfolio of L&T was INR 860 billion, up 14% year on year, he said.

 

The order book of the company was INR 7.79 trillion at the end of the June quarter, up 27% from a year ago. Of this, the domestic order book excluding realty was INR 3.54 trillion "with the customer mix tilting towards the private sector over the past 12 months," according to the official. Replying to an analyst's question, he said 50% of the total order book is fixed and the other half has variable pricing.

 

In the management's assessment, L&T has a strong addressable prospects pipeline of around INR 15 trillion for the near term. These prospects are on the basis of current pricing, a senior official said.

 

Around 49% of the prospects pipeline is for domestic orders, and of this, the share of the private sector is around 45%, according to the management.  The private sector share in order prospects a year ago was 35-45%, and so the current share of 45% does not indicate a sharp increase, the official said.

 

Of the order prospects pipeline for Jul-Mar, the transportation infrastructure has a share of 25%, followed by heavy civil infrastructure at 22%, power transmission and distribution at 17%, and buildings and factories at 15%, the management said.

 

L&T's consolidated net profit for the June quarter rose 14% on year to INR 41.23 billion. The company's consolidated revenue from operations rose 7% on year to INR 679.42 billion. Tuesday, the company's shares ended at INR 3,832 on the National Stock Exchange, up 0.7% from the previous close.  The company detailed its June quarter earnings after market hours. End

 

Edited by Saji George Titus

 

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