Middle East supply chain disruption
Logistics and insurance costs have risen materially; management is negotiating cost pass-through with clients, but uncertainty remains.
LT / Q4-FY26 / risks
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Larsen & Toubro · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
high
Legacy project cost overruns in energy segment
Energy segment margins fell to 6.5% due to cost overruns in legacy hydrocarbon projects; management expects improvement only after a couple of quarters.
Execution delays in domestic water projects
Water and effluent treatment projects faced subdued progress due to pending clearances; recovery is expected but not guaranteed.
Potential margin pressure from fixed-price contracts
Analyst raised concern about fixed-price Middle East orders amid inflation; management cited contractual provisions and client negotiations, but outcome is uncertain.