Synopsis: L&T posted steady FY26 growth with strong order inflows, improving cash flows, and lower working capital. Growth was driven by energy, manufacturing, and services, while strategic exits improved balance sheet strength.
The shares of this large cap company majorly engaged in providing engineering, procurement and construction (EPC) solutions in key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology, were in focus after its order inflow grew by 22 percent and order book grew 28 percent.
With the market capitalization of Rs. 5,53,548 Crores, the shares of Larsen and Toubro ltd were trading at around Rs. 4024 per share which is 9.3 percent discount from its 52-week high of Rs. 4440 per share and is trading at a P/E of 32.3 whereas industry P/E stands at 19
Q4 FY26 result
Year on year analysis: Revenue from operations has increased from Rs. 74,392 Crores to Rs. 82,762 Crores, up 11 percent. Operating profit has increased from Rs. 9876 Crores to Rs. 10419 Crores, up 5 percent and net profit has decreased from Rs. 6156 Crores to Rs. 6133 Crores, down 0.3 percent
Quarter on Quarter analysis: Revenue from operations Revenue from operations has increased from Rs. 71450 Crores to Rs. 82762 Crores, up 15.8 percent. Operating profit has increased from Rs. 9190 Crores to Rs. 10419 Crores, up 13.3 percent and net profit has increased from Rs. 3825 Crores to Rs. 6133 Crores, up 60 percent
Strong Growth Backed by Orders
Larsen & Toubro reported a solid FY26 performance with revenue rising 12 percent year-on-year to Rs. 2.86 lakh Crores , while recurring profit after tax increased 18 percent to Rs. 17,200 Crores. The biggest positive for the company was the strong order inflow, which grew 22 percent to Rs. 4.36 lakh Crores . The total order book also expanded 28 percent year-on-year to Rs. 7.4 lakh Crores , giving the company strong long-term revenue visibility. International orders accounted for 52 percent of the order book, supported mainly by large projects from the Middle East.
L&T reported FY26 order inflow of Rs. 4.36 lakh Crores, led by Infrastructure with a 46 percent , followed by Energy at 31 percent and Services at 17 percent . Hi-Tech Manufacturing and Others contributed 2 percent and 4 percent respectively. Geographically, India accounted for 42 percent of orders, while the Middle East remained a strong international market with a 36 percent share. USA & Europe contributed 15 percent , while the rest of the world accounted for 7 percent.
Energy and Manufacturing Businesses Lead Growth
The Energy Projects segment remained one of the strongest growth drivers during the year. Revenue from the segment rose 35 percent due to strong execution in hydrocarbon and related projects. However, margins declined because of cost overruns and closure costs in some older projects. Hi-Tech Manufacturing also delivered strong growth, with revenue increasing 46 percent . The Precision Engineering & Systems business saw healthy execution momentum, while Heavy Engineering benefited from nuclear-related equipment orders.
Infrastructure Projects, which remain L&T’s largest business, saw softer growth. Revenue increased only 3 percent during FY26 due to slower progress in some domestic and international projects. Still, margins improved because of a better project mix.
Services and Technology Businesses Stay Stable
The IT and Technology Services segment continued to perform steadily. Revenue grew 12 percent during the year, supported by broad-based demand across businesses. L&T said operational efficiencies and portfolio adjustments helped margins remain stable. The company also highlighted future opportunities in AI-led services, semiconductor design, and digital platforms.
Financial Services delivered another strong quarter with record retail disbursements. The loan book grew 25 percent to Rs. 1.22 lakh Crores . Asset quality and collection efficiency also improved, helping profitability remain healthy.
Better Cash Flow and Lower Working Capital
One of the biggest improvements during FY26 came from cash flow management. Operating cash flow excluding the financial services business jumped 87 percent year-on-year to Rs. 355 billion. Net working capital reduced sharply to 4.1 percent of revenue from 11 percent last year, showing better execution discipline and faster cash collection. The company also improved its balance sheet, with net debt-to-equity reducing significantly.
Conclusion
L&T ended FY26 with strong order inflows, steady execution growth, improving cash flows, and better balance sheet efficiency. The company continued to benefit from infrastructure spending, energy opportunities, and global project demand, especially from the Middle East. Strategic exits from non-core assets and investments in areas like green energy, semiconductors, and data centers also reflect its focus on long-term growth. With a record order book and improving return ratios, the company remains well positioned for the coming years.
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