Although not fully immune, large-cap companies offer some resilience amid heightened volatility and uncertainty with the war in West Asia as well as the energy supply chain bottlenecks that it has caused.
In this regard, engineering major and conglomerate Larsen & Toubro (L&T) with subsidiaries spanning IT, financial services and a few other key industries requires investor attention.
Although L&T has significant operations in West Asia, the company has recently said that 95 per cent of its sites are functioning normally and the war’s impact has not been very significant as of now on order executions.
In a somewhat ironic twist, given L&T’s extremely strong presence in the energy segment in West Asia and long association with top players, all the reconstruction of factories, refineries, airports and other infrastructure actually opens up future opportunities.
Nonetheless, some disruptions are possible in the current unpredictable scenario, though long-term visibility still remains healthy for the company.
After touching a peak of ₹4,440 in February this year, L&T’s shares corrected sharply by almost 25 per cent, before recovering some ground over the past few days.
At ₹3,559, the stock of L&T trades at under 20 times its likely per share earnings for FY27, making it a reasonably-attractive bet for those with a horizon of three-plus years. Over the past three years, the stock has generally traded north of 27 times.
Investors wishing to play relatively cautiously in light of the war and other uncertainties can consider accumulating the stock at current levels and adding more on declines linked to the broader market.
A solid order-book, traction across key segments of operations and proven execution capabilities in complex engineering projects (domestic and international) are all positives for the company. A well-established marquee client base domestically and internationally is a key advantage for L&T.
Over the three financial years from FY22, L&T’s consolidated revenue grew at a CAGR of 17.8 per cent to ₹2,55,734 crore in FY25, while net profits (excluding exceptional items) grew at 19.3 per cent over the same period to ₹14,562 crore. Including the exceptional items – profits from discontinued operations – the net profit for FY25 would be a tad higher at ₹15,037 crore.
In the 9MFY26 period, the company’s revenue grew 12 per cent to ₹2,03,112 crore, while adjusted net profit increased 25 per cent over the same period to ₹11,949 crore. If the one-time exceptional item of provisions made for the new social security wage code are included (₹1,190 crore), the net profit figure would be ₹10,758 crore (up 13 per cent).
Engineering prowess
L&T’s core business broadly fall under three segments – infrastructure, energy and hi-tech manufacturing projects.
Infrastructure projects include buildings & factories, heavy civil works, water treatment plants, transmission & distribution, renewables, transportation, and minerals & metals. This segment contributed 46 per cent of overall revenues for 9MFY26 and grew 4 per cent.
Energy projects include hydrocarbon, CarbonLite solutions and clean energy works. This vertical accounted for 19 per cent of revenues in 9MFY26, up a solid 35 per cent.
Hi-tech manufacturing includes heavy engineering, precision engineering & systems and electrolyser manufacturing. This sector made up 4 per cent of revenues and grew by a healthy 46 per cent.
Then there are developmental projects such as the Hyderabad metro, Nabha Power and green energy. In addition, there are realty and construction projects that the company undertakes. These two segments together accounted for 3 per cent of overall revenues with realty witnessing robust traction.
At such a large scale, L&T steadily maintains a healthy overall consolidated EBITDA margin of around 11.5 per cent consistently. The split is usually 8 per cent for projects and manufacturing, and over 20 per cent for services and development projects.
Strong order traction
L&T had a rock solid order-book position of ₹7.33 lakh crore as of December 2025. This order-book position is roughly 3x its consolidated revenues giving considerable visibility.
Around 58 per cent of the order-book is from the infrastructure segment, 34 per cent from energy, 3 per cent from hi-tech manufacturing and 3 per cent from others.
The order mix is also diversified geographically with 51 per cent from India, 37 per cent from West Asia and 12 per cent from the rest of the world.
L&T has one of the best engineering execution records. Atal Setu, Kempe Gowda International Airport Terminal 2, Dwarka Expressway, Mumbai Coastal Road, Khargone Thermal Plant, K9 Vajra for Indian Army and many other projects are key execution successes domestically.
Riyadh Metro, Al Rayyan Stadium – Doha, Overhead Transmission Line in Saudi Arabia, Cryostat for ITER France, Flacq Hospital Mauritius, Heat Exchanger in Turkey, Modularised Reformers for Blue H2 project in Rotterdam, The Netherlands, are some key overseas engineering projects.
L&T’s newer businesses such as data centres, semiconductor design and digital platforms are still in nascent stage and have not contributed significantly to revenues. However, the company is expanding on this front rapidly and is getting into hyperscale data centres in Mumbai, Chennai and Bengaluru. On semiconductors, it is in contact with multiple customers for prospective sales.
Services hold steady
As mentioned earlier, L&T has three listed subsidiaries – LTIMindtree, L&T Technology Services and L&T Finance.
The services segment accounts for 28 per cent of the 9MFY26 revenues for the group.
IT and technology services accounted for about 24.2 per cent of the net profits, and financial services for 13.4 per cent in this 9MFY26 period, totalling 37.6 per cent of L&T’s overall profits.
In a period that has seen software technology firms hurt by AI disruptions, both the technology firms from the L&T stable have done relatively better, although they, too, will face some disruptions in future, similar to peers.
Revenues are up 11 per cent for 9MFY26 for the IT & technology subsidiaries. EBITDA margin was at 19.8 per cent.
In the financial services firm, income from operations (net revenue) grew 11 per cent and the loan book grew 20 per cent for 9MFY26. Return on assets was healthy at 2.31 per cent, while capital adequacy was solid at 19.1 per cent.
Robust financials
Since consolidated figures include L&T Financial Services, we take the standalone numbers for L&T to gauge key debt metrics.
The debt-equity ratio for the nine months ended December 2025 was just 0.2, down from 0.38 a year earlier. Interest coverage ratio is healthy at 9.43 times currently versus 6.4 times a year ago.
The falling cost of debt and healthy cash flows towards debt servicing helped the firm.
Any serious escalation in the war that hurts larger parts of West Asia operations in its core businesses and continued disruption from AI in its technology subsidiaries that hurt growth and margins, are risks to this recommendation.
Published on March 28, 2026