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Informist, Thursday, Jan. 29, 2026

By Anand JC

MUMBAI – Larsen & Toubro Ltd. late Wednesday said the margins of its hydrocarbons business, which have been soft, will pick up in two-three quarters. "The margin decline in the hydrocarbons business is primarily due to cost overruns in a few competitively priced domestic and international projects," its management told analysts in a post-earnings conference call.

L&T's energy segment reported an earnings before interest, tax, depreciation, and amortisation margin of 5.9% for the December quarter, down from 8.3% in the year-ago quarter. Hydrocarbon business forms the biggest chunk of its energy segment, with its EBITDA margin falling to 6.3% from 8.1% in the year-ago quarter. "I wish to assure you that these projects are at the final stages of completion, and hopefully, the margin uptake will be seen sometime maybe after 2-3 quarters into the next year," a company executive said while clarifying the status of these energy segment projects.

L&T's order book stood at INR 7.33 trillion as of Dec. 31, up 30% on year, with around 92% of the total order book comprising infrastructure and energy orders.

The company is on track to achieve its revenue growth guidance of 15% on year for 2025-26 (Apr-Mar), given the fact that the March quarter is the busiest for L&T's projects and manufacturing business portfolio. "We expect the customary ramp up in project execution during Q4 and are reasonably confident of achieving our full year revenue growth guidance of 15%," the company said. 

Additionally, the management reiterated confidence about exceeding the growth guidance of 10% on year for order inflow in FY26. Strong momentum in capital expenditure supported the company's order inflow in the first six months of FY26. 

Revenue of L&T's infrastructure projects segment grew 5% on year to INR 337 billion for the December quarter. The company said this growth would've been around 8-9% if one were to exclude the water segment from it. Projects in the water segment are not getting funding from the Centre, which has dragged down the momentum and caused a moderation in revenues for the infrastructure projects segment as a whole. Water and effluent treatment form 18% of L&T's infrastructure projects segment.

"Certain projects which have been under the central plan funding, some of these projects have faced headwinds in terms of fund allocation. And to that extent...we have also calibrated our execution momentum in this segment to the extent of funds that we receive," the company said. "Had this fund allocation been normalised, growth of revenue in the infra segment would have been more," the company said.

In the domestic sector, L&T expects order inflow to remain healthy. Segments such as building and factories, minerals and metals are seeing sustained improvement in traction. "There are two other segments which are seeing a clear case of revival and I feel that this revival will potentially offset some of the muted or subdued opportunities," the company said, referring to very large heavy civil and transportation intra projects.

L&T had reported its December quarter financials after the markets closed on Wednesday. Its consolidated revenue from operations for the reporting quarter rose over 10% on year and over 5% on quarter to INR 714.50 billion. However, its net profit for the quarter fell nearly 4% on year and more than 18% on quarter to INR 32.15 billion, dragged down by a heavy one-time cost on account of the changes prompted by the new labour codes.

The company's consolidated net profit for the first nine months of FY26 rose nearly 13% on year to INR 107.58 billion and its revenue from operations grew 12% to INR 2.03 trillion.

At 1000 IST, shares of the company traded 2.1% higher at INR 3,875 on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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