.png){kind=logo}
Shares of engineering and infrastructure major Larsen & Toubro fell nearly 4% on Wednesday after the company reported weaker-than-expected March quarter earnings. The earnings report also flags execution challenges linked to geopolitical disruptions in the Middle East.
The stock dropped as much as 3.85% to Rs. 3,900 during intraday trade, ending up as the worst-performing stock on the BSE. By the afternoon trading session, L&T shares were down 3.35% at Rs. 3,920.30.
L&T reported a 3% year-on-year decline in consolidated net profit for the January-March quarter of FY26 at Rs. 5,325.60 crore, compared with Rs. 5,497.26 crore in the same quarter last year. The previous year’s figure included an exceptional gain.
Revenue from operations rose 11.25% year-on-year to Rs. 82,762.16 crore from Rs. 74,392.28 crore, supported by steady order execution across segments.
EBITDA for the quarter increased 5% to Rs. 8,610 crore from Rs. 8,203 crore a year ago. Margins, however, narrowed sharply by 60 basis points to 10.4% from 11%, reflecting higher raw material costs and slower execution in core engineering and construction operations.
The company also announced a final dividend of Rs. 38 per share for FY26.
Even with lower profits, the company’s pipeline was healthy. Total consolidated order intake for the quarter was Rs. 89,772 crore, while the overall order book witnessed record highs to reach Rs. 7,40,327 crore, reflecting a Y-o-Y rise of 28%.
According to reports, delays in domestic water projects, along with disruptions due to the US-Iran tensions, had a negative impact on execution during the quarter.
Motilal Oswal Financial Services maintained an optimistic long-term view, driven by visibility into growth in its core engineering and construction businesses. Motilal had increased its target price for the stock to Rs. 4,550 from Rs. 4,200.
On the other hand, ICICI Securities cut down their rating for the stock to 'Add' from 'Buy' with a lower target price of Rs. 4,300 citing lower margins and geopolitics.
Also Read: L&T Q4 FY26 Profit Falls 3% to Rs. 5,326 Crore, Revenue Rises 11%, Order Book Hits Record High
Brokers forecast short-term execution challenges owing to supply chain issues along with Middle East geopolitics. But, brokers still feel that L&T is positioned well to take advantage of rising infrastructural investment, green investments, semiconductor fabrication facilities, and data centers going forward.
The shares of L&T have surged by more than 18% in one year and nearly 193% in the last five years.
