L&T hits record order inflows in Q3, fueled by Middle East, domestic growth

India’s largest engineering and infrastructure conglomerate Larsen & Toubro Ltd (L&T) reported a record high inflow of new orders during the third fiscal quarter ended 31 December. Another record: L&T’s overall order book swelled by a fifth since the beginning of the financial year to close at ₹5.64 trillion as of 31 December.

The company’s fresh orders of ₹1.16 trillion during Q3 were 53% more than the same period last year. Just over half of these orders came from overseas, mainly the Middle East, where governments are commissioning mega projects at a frenzied pace in their push to move away from oil revenues. A big-ticket order from state-owned power major NTPC Ltd added heft to the order book.

“We expect the Middle East to continue to strengthen its physical and digital infrastructure besides continuing to monetise its oil & gas assets,” L&T chairman and managing director S.N. Subrahmanyan said in a press statement on Thursday. “Amid this backdrop, the company will continue to pursue excellence and leverage its strengths to seize new opportunities while remaining resilient.”

Domestic order inflows during the quarter also more than doubled year-on-year to ₹53,900 crore from ₹25,400 crore last year. This was led by a large ₹23,000-crore order from NTPC booked during the quarter.

“It is encouraging that the domestic orders have picked up pace and we hope that the trajectory continues,” said R. Shankar Raman, president, whole-time director and CFO of the company.

“There has been some balancing of the skew towards international orders that we were witnessing over the past few quarters,” he said, adding that the central government’s infrastructure-led orders are expected to fully revive in the ongoing quarter now that the Lok Sabha elections are over.

Interestingly, during the third quarter, L&T’s revenues edged past India’s largest information technology services firm Tata Consultancy Services (TCS), which is considered the bellwether of India’s IT exports.

L&T reported a consolidated topline of ₹64,668 crore during the quarter, which was 17% more than the corresponding period last year. TCS reported consolidated revenues of ₹63,973 crore, which was a little less than 6% growth over a year ago.

L&T’s consolidated profit grew by 14% year-on-year to ₹3,359 crore.

The growth in earnings before interest, tax, depreciation and amortization (Ebitda) was slower than the revenue expansion at just under 9% to ₹6,255 crore. Subsequently, Ebitda margin narrowed 77 basis points to 9.67%. One basis point is 0.01%.

The margin fall was largely on account of a slowdown in the company’s IT business, which consists of two listed subsidiaries—LTIMindtre and L&T Technology Services—and gets almost all its revenue from overseas.

“The needle moved because of the softer margins reported by the IT segment,” Shankar Raman said. “The technology transition is causing a revision in the business model and offering across the industry. Both the companies are coping with these changes appropriately to stay relevant in their offerings to the global customers.”

Analysts give thumbs-up

“The standout number is the record-breaking ₹1.16 lakh crore ( ₹1.16 trillion) order inflow, signalling strong demand across sectors like power, renewables, and hydrocarbons,” said Nirav Karkera, head of research at Fisdom, a wealth management platform.

The development of note was the project to build Uzbekistan’s first AI-enabled data centre, he said, which highlights the company’s push into the digital and artificial intelligence space. This strategic order aligned well with the evolving technology landscape and could open doors for similar high-value projects in global markets, he said.

“Looking ahead, L&T appears well-positioned to benefit from government-led infrastructure spending in India and sustained project activity in the Middle East. While execution remains key, the company’s diversified order book and strong balance sheet should help it navigate any near-term macro uncertainties,” Karkera said.