Larsen & Toubro FY26 Annual Earnings Summary
4 quarters covered · ₹2,85,875 Cr revenue · ₹18,954 Cr PAT · 13.0% average EBITDA margin.
Quarter-by-quarter progression
Management promises made during the year
Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q1 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q3 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY26Current-quarter commentary contains related risk or weakness, so the promise appears not to have been delivered yet.
Q4 FY26Risks flagged during the year
Logistics and insurance costs have risen materially; management is negotiating cost pass-through with clients, but uncertainty remains.
Q1 FY26 · mediumExecution ramp-up in competitively priced hydrocarbon jobs awarded in 2021-22 may keep margins subdued in H1 FY26.
Q1 FY26 · mediumJal Jeevan mission projects face fund allocation issues, impacting execution and working capital in the water segment.
Q1 FY26 · mediumEscalation of conflicts in West Asia could disrupt energy prices, investments, and global trade flows, affecting international operations.
Q2 FY26 · mediumEnergy segment margins declined to 7.3% due to cost overruns in a few domestic and international projects nearing completion. Management expects soft margins to persist in the near term.
Q2 FY26 · mediumInfrastructure revenue declined 1% YoY partly due to slower progress in rural water supply projects facing payment challenges. Management has slowed execution until payments improve.
Q2 FY26 · mediumWith 49% of order book from international markets (84% Middle East), any geopolitical instability or supply chain disruptions could impact execution and margins.
Q3 FY26 · mediumCost overruns in a few competitively priced domestic and international projects are expected to persist for 2-3 quarters.
Q3 FY26 · mediumWater segment revenue dragged infra growth due to fund allocation issues; management expects resolution within a quarter.
Q3 FY26 · mediumSeveral Kuwait projects where L&T was competitive were canceled due to budget issues; though expected to re-tender, timing is uncertain.
Q4 FY26 · mediumEnergy segment margins fell to 6.5% due to cost overruns in legacy hydrocarbon projects; management expects improvement only after a couple of quarters.
Q4 FY26 · mediumWater and effluent treatment projects faced subdued progress due to pending clearances; recovery is expected but not guaranteed.
What changed through the year
Q1 FY26 · Group order inflows growth of 10% for FY26
Management expects group order inflows to grow 10% year-on-year for the full fiscal year.
Q1 FY26 · Group revenue growth of 15% for FY26
Group revenues are expected to grow 15% year-on-year for FY26.
Q1 FY26 · P&M margin target of 8.3%-8.5% for FY26
Products and manufacturing portfolio EBITDA margin is targeted in the 8.3%-8.5% range for the full year.
Q1 FY26 · Net working capital to revenue guidance of 12% for March 2026
Net working capital to revenue ratio is expected to be 12% as of March 2026.
Q2 FY26 · FY26 order inflow growth to exceed 10% guidance
Management is confident of exceeding the full-year guidance of 10% growth in group order inflows, citing strong H1 momentum and robust prospects pipeline.
Q2 FY26 · FY26 revenue growth guidance maintained at 15%
Group revenue growth guidance of 15% for FY26 is maintained, with stronger H2 execution expected.
Q2 FY26 · FY26 P&M EBITDA margin target of 8.5%
Management is reasonably confident of achieving the full-year P&M EBITDA margin target of 8.5%, with H1 margin at 8.4% and H2 execution pickup expected.
Q2 FY26 · FY26 working capital guidance unchanged at ~12%
Net working capital to revenue ratio is expected to be around 12% by March 2026, unchanged from prior guidance.
Q3 FY26 · FY26 revenue growth guidance of 15% retained
Management is confident of achieving 15% full-year revenue growth, with Q4 execution ramp-up expected.
Q3 FY26 · Projects & manufacturing margin target of 8.5% for FY26
9M PM margin at 7.9% is in line with the full-year target of 8.5%, despite hydrocarbon margin softness.
Q3 FY26 · Revised net working capital to sales target of ~10% for FY26
Improved to 8.2% in Dec 2025; revised target from 12% to ~10% by March 2026.
Q3 FY26 · Order inflow guidance to be exceeded
9M order inflow growth of 30% YoY; management expects to exceed the 10% full-year guidance.
Q4 FY26 · FY27 order inflow growth 10%-12%
Group order inflows expected to grow 10%-12% in FY27, supported by a prospects pipeline of INR 17.8 trillion.
Q4 FY26 · FY27 revenue growth 10%-12%
Revenue growth guided at 10%-12% for FY27, with softer H1 due to supply chain disruptions and recovery in H2.
Q4 FY26 · FY27 PP&M margin stable at 7.8%
Projects, Products & Manufacturing segment margin expected to remain stable at 7.8% in FY27.
Q4 FY26 · Lakshya 2031: 12%-15% revenue CAGR, 16%-17% ROE
Over five years, L&T targets order inflow CAGR of 10%-12%, revenue CAGR of 12%-15%, and ROE of 16%-17%.