LARSENANDTOUBRO Q3 FY26 earnings call.
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Revenue
₹71,400 Cr
verification pending
Revenue YoY
10%
reported change
EBITDA
Pending
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
L&T delivered its highest-ever quarterly order inflows of ₹1,36,500 crore in Q3 FY26, up 17% YoY, driven by robust domestic private sector demand across buildings, semiconductors, data centers, and minerals & metals. Group revenues grew 10% YoY to ₹71,400 crore, with margin expansion of 70bps to 10.4%. However, reported PAT declined 4% to ₹3,200 crore due to a one-time ₹1,190 crore labor code provision, while recurring PAT surged 31% to ₹4,400 crore. The order book stands at ₹7.33 lakh crore (up 30%), providing strong visibility. Management maintained FY26 guidance: 15% revenue growth and 8.5% P&M EBITDA margin, expecting Q4 execution ramp-up. Key risks include hydrocarbon margin pressure from legacy cost-overrun projects (expected 2-3 quarters to resolve) and domestic infrastructure weakness in water treatment due to funding delays. The company secured a landmark 10.8 GW offshore HVDC order and announced data center rebranding as L&T Boma, reflecting strategic diversification into new-age infrastructure.
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Guidance to track
- Management retained full-year revenue growth guidance of 15% citing expected Q4 execution ramp-up across all segments, particularly in the P&M portfolio where 9-month growth was 12%.
- Full-year P&M margin guidance of 8.5% maintained despite Q3 margin softness in hydrocarbons. Legacy project cost overruns factored into guidance; margin expected to improve in 2-3 quarters as these projects conclude.
- Based on 30% YoY growth in 9-month order inflows and healthy prospects pipeline, management stated they will exceed the original 10% order inflow guidance for FY26.
- Original guidance of 12% revised sharply to 10% following stronger collection intensity and improved contractual terms, particularly from private sector orders which now constitute 36% of domestic order book.
Risks flagged
- Cost overruns on competitively priced legacy domestic and international hydrocarbon projects are expected to keep margins soft. These projects are in terminal execution phase and margins will normalize only after completion.
- Fund allocation issues for central government-funded water projects have impacted domestic infrastructure revenue growth. Execution momentum calibrated to fund flows; growth would have been 8-9% excluding water impact vs reported 5%.
- Eight projects where L&T was L1 bidder were cancelled due to budget constraints; while management expects re-tendering in calendar 2026, scope and timing remain uncertain. Not currently in order book.
- Domestic infrastructure prospects pipeline flat YoY at ₹4.02 lakh crore; growth dependent on private sector revival in B&F, minerals & metals, and thermal power. Government capex re-acceleration post-budget is uncertain.
Key quotes
- We witnessed our highest ever quarterly order inflows in Q3 FI26 of rupees 1,356 billion recording a 17% growth year-on-year led by a strong ordering momentum witnessed across both India and overseas markets.
- The margin decline in the hydrocarbons business is primarily due to cost overruns in a few competitively priced domestic and international projects. These projects are in their terminal execution phase and are expected to conclude over the next few quarters during which margins will remain soft.
- The recurring PAT for Q3 FI26 at rupees 44 billion was up by 31% on a YoY basis. The increase in recurring PAT is reflective of improved activity levels, operational efficiencies and efficient treasury management.
- We will be exceeding the 10% order inflow guidance for FI26... 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%.
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