Synopsis: Large cap EPC company’s shares are in the focus today after announcing strong Q2 results.
A Large-cap company that is primarily engaged in providing engineering, procurement and construction (EPC) solutions, is in the spotlight today after posting Q2FY26 results. Read the article below for detailed insights into its performance.
With a market capitalization of Rs. 5,48,544.22 crore, the shares of Larsen & Toubro Limited closed at Rs. 3,987.80, up by 0.91 percent from its previous closing price of Rs. 3,951.70. The stock has touched an intraday high of Rs. 4,062.50 in today’s trading session.
Q2FY26 Results
Larsen & Toubro Limited reported Rs. 67,983.53 crore in revenue for the second quarter of FY26, an 10.44 percent increase over the Rs. 61,554.58 crore for the same period in FY25. It increased by 6.76 percent as compared to Rs. 63,678.92 crore in Q1 FY26.
The company’s EBITDA for Q2 FY26 stood at Rs. 8,513 crore, up by 6.09 percent from Rs. 8,024 crore in Q1 FY26, and inclined by 7.53 percent from Rs. 7,917 crore in Q2 FY25.
The consolidated net profit for the second quarter of FY26 was Rs. 4,678.09 crore, which was 8.15 percent higher than the Rs. 4,325.57 crore reported in the previous quarter and increased by 13.75 percent from Rs. 4,112.81 crore in Q2 FY25. Profit growth was also reflected in earnings per share (EPS), which increased to approximately Rs. 28.54 in Q2 FY26 from Rs. 26.30 in Q1 FY26 and Rs. 24.69 in Q2 FY25.
Order Book Details
As of September 30, 2025, the company reported a robust order book of Rs. 6,67,000 Crores, reflecting 31 percent YoY growth, with 51 percent domestic and 49 percent international orders. The order mix comprises 59 percent infrastructure, 32 percent energy, and 6 percent hi-tech manufacturing, and 3 percent from other segments. The company also maintains a healthy prospect pipeline of Rs. 10.4 trillion for the near term.
Management View
According to S. N. Subrahmanyan, Chairman and Managing Director of L&T, the company delivered a strong all-round financial performance, reinforcing its leadership in the EPC sector through consistent order wins and execution across diverse geographies. He highlighted robust capex spending in India and the Middle East, supporting a positive outlook for new orders.
Subrahmanyan also noted the company’s agreement with the Telangana government to divest its stake in L&T Metro Rail (Hyderabad) as part of its Lakshya 2026 strategy to exit public concessions. He added that L&T is streamlining and expanding its technology-led businesses to complement its core operations, with the IT & TS portfolio performing strongly and L&T Finance showing improved results through its retail-focused, tech-driven approach.
Revenue Segment
Infrastructure Projects Segment
The Infrastructure Projects segment reported order inflows of Rs. 52,686 crore in Q2 FY26, up 6 percent YoY, driven by major domestic and international wins across Buildings & Factories, Heavy Civil Infrastructure, Power Transmission & Distribution, and Renewables. International orders contributed 48 percent of the total inflows. The order book stood at Rs. 3,94,706 crore, with 43 percent being international. Revenue for the quarter declined 1 percent YoY to Rs. 31,759 crore due to slower progress in water projects and extended monsoon conditions. EBITDA margin improved to 6.3 percent from 6.0 percent on the back of execution efficiency.
Energy Projects Segment
The Energy Projects segment recorded a sharp 100 percent+ YoY growth in order inflows to Rs. 38,156 crore, driven by large Hydrocarbon orders in both Onshore and Offshore businesses, with 98 percent of these being international. The segment’s order book reached Rs. 2,14,496 crore, 71 percent of which was international. Revenue surged 48 percent YoY to Rs. 13,082 crore, primarily from Hydrocarbon project execution, with international revenue contributing 78 percent. EBITDA margin moderated to 7.3 percent from 8.9 percent due to project variations at the closure stage.
Hi-Tech Manufacturing Segment
Order inflows in the Hi-Tech Manufacturing segment fell 34 percent YoY to Rs. 2,582 crore due to deferred orders, though exports made up 18 percent of the total. The order book stood at Rs. 39,064 crore, with exports contributing 11 percent. Revenue grew 33 percent YoY to Rs. 2,754 crore, supported by improved execution in Heavy and Precision Engineering businesses. EBITDA margin rose to 14.7 percent from 12.8 percent, reflecting stronger operational profitability.
IT & Technology Services Segment
The IT & Technology Services (IT&TS) segment posted revenues of Rs. 13,274 crore in Q2 FY26, a 13 percent YoY rise, aided by improved spending across the IT sector. International billing accounted for 92 percent of revenues. EBITDA margin dipped slightly to 20.2 percent from 21.0 percent due to higher costs from newly incubated businesses and lower margins in L&T Technology Services.
Financial Services Segment
The Financial Services segment registered a 9 percent YoY increase in income to Rs. 4,166 crore, supported by higher disbursements in retail finance. The total loan book grew 10 percent YoY to Rs. 1,07,096 crore, with retail loans now forming 98 percent of the portfolio. Profit before tax rose to Rs. 989 crore from Rs. 940 crore, driven by improved net interest margins and fee income.
Development Projects Segment
Development Projects revenue increased 10 percent YoY to Rs. 1,533 crore in Q2 FY26. However, EBIT declined to Rs. 87 crore from Rs. 125 crore due to provisions related to an ongoing legal matter in Nabha Power. Improved profitability from L&T Metro Rail Hyderabad (L&TMRHL), aided by fare revisions, partially offset the impact.
Others Segment
The Others segment, comprising Realty, Industrial Valves, Construction Equipment, Mining Machinery, and Rubber Processing Machinery, saw revenue decline 14 percent YoY to Rs. 1,416 crore, mainly due to lower residential unit handovers in Realty. Export sales formed 19 percent of total revenue, largely from the Industrial Valves business. EBITDA margin improved sharply to 31.3 percent from 25.1 percent, boosted by the sale of a commercial property in the Realty division.
About the company
Larsen & Toubro Limited (L&T), founded in 1938 and headquartered in Mumbai, is a diversified EPC and technology company operating in India and internationally. Its business spans infrastructure and energy projects, hi-tech manufacturing, IT and technology services, financial services, and development projects, offering solutions across construction, power, defense, aerospace, green energy, and realty.
A return on equity (ROE) of about 16.6 percent, a return on capital employed (ROCE) of about 14.5 percent and debt to equity ratio of 1.36 demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 34.1x higher as compared to its industry P/E 22.2x.
Written By Akshay Sanghavi
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