Larsen & Toubro (L&T) is poised to release its first-quarter results, with analysts expecting a mixed performance that balances immediate challenges with strong long-term prospects. While geopolitical tensions in the Middle East and rising operational costs are set to impact the current quarter, a robust order book and optimistic management guidance for future periods offer a compelling strategic outlook.
The engineering and construction giant’s Q1 performance is projected to show modest growth. Revenue is anticipated to increase by 7%, with operating profit rising by 8%. However, higher raw material and logistics costs are expected to keep margins tight, hovering around 10% from 9.9%. Consequently, net profit could see an 11% decline, largely attributed to execution slowdowns stemming from Middle East disruptions affecting core EPC (Engineering, Procurement, and Construction) and E&C (Engineering & Construction) segments.
Despite these near-term headwinds, L&T’s future trajectory appears strong. The company boasts a record order book of approximately ₹7.4-7.5 lakh crore, which is expected to fuel significant growth and execution recovery, particularly in the second half of FY27. Management has consistently provided positive guidance for FY27, including potential for new large orders from the Middle East, signaling no anticipated revisions to their optimistic long-term projections.
This strategic positioning underscores L&T’s resilience. While the immediate quarter reflects the challenging operating environment, the sheer scale of its order book provides a clear runway for sustained revenue and profit growth. Investors are keenly watching the management’s commentary for further insights into their revival strategies and the pace of execution recovery.
An analyst, Sumit Ji, advises investors to hold their positions, viewing any market dips as buying opportunities. L&T’s stock has seen a significant correction, dropping approximately ₹600 from its peak of ₹4270 in the last one and a half months. He suggests that once the ₹3900 level is breached, the stock could quickly target ₹4100-₹4200, reflecting confidence in the company’s underlying fundamentals and future growth potential.
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