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L&T reported a steady Q1FY27 performance

ICICIdirect Research 29 Jul 2026 DISCLAIMER

News: L&T reported a steady Q1FY27 performance, with consolidated revenue increasing 7% YoY to ₹67,942 crore. EBITDA declined 3% YoY to ₹6,116 crore, while EBITDA margin contracted 90 bps YoY to 9.0%, impacted by execution challenges in the Water & Effluent Treatment business, supply-chain disruptions in the Solar business due to the West Asia conflict, an adverse revenue mix, higher credit provisions and forex-related headwinds in the Technology business. PAT increased 14% YoY to ₹4,123 crore, supported by lower finance costs & higher other income. Order inflows grew 14% YoY to ₹1.08 lakh crore, with international orders contributing 56%, while the consolidated order book increased 27% YoY to a record ₹7.79 lakh crore, providing strong multi-year revenue visibility. Segmentally, Infrastructure & Utilities secured ₹44,357 crore of orders (more than 2x YoY) led by Residential & Commercial Buildings and Ferrous Metals projects, although revenue declined 3% YoY due to execution challenges in the Water & Effluent Treatment business. Energy-Conventional revenue increased 14% YoY on improved Hydrocarbon and CarbonLite execution despite a 90% YoY decline in order inflows owing to deferred large orders and a high base. Energy-Green recorded 58% YoY growth in order inflows to ₹33,042 crore, driven by offshore wind projects, while Manufacturing & Products reported 74% YoY growth in order inflows and 9% YoY revenue growth, supported by Heavy Engineering, Precision Engineering and Construction Equipment businesses.

View: L&T's performance reflects healthy ordering momentum, with a record ₹7.79 lakh crore order book providing multi-year revenue visibility. However, execution during the quarter was impacted by Water & Effluent Treatment project delays, supply-chain disruptions in the Solar business due to the Middle East conflict, and higher ECL provisions, resulting in margin pressure. Despite these near-term headwinds, the company continues to witness a healthy ₹15 trillion prospect pipeline for the balance of FY27, comprising Infrastructure & Utilities (₹7.82 trillion), Energy-Conventional (₹4.37 trillion), Energy-Green (₹2.43 trillion) and Manufacturing & Products (₹0.46 trillion). The pipeline remains well diversified, with 49% of opportunities from the domestic market, supported by improving private-sector capex (~45% of the domestic pipeline) across buildings, metals & minerals and power, while international opportunities continue to be driven by hydrocarbon and offshore wind projects. Management expects Middle East ordering activity to recover from Q2 and has maintained its FY27 guidance of 10–12% order inflow growth, 10–12% revenue growth, ~7.8% PPM EBITDA margin and ~10% working capital. Overall, L&T remains well positioned to benefit from sustained infrastructure spending, a diversified project portfolio and healthy execution visibility, with the pace of Middle East order conversion, execution recovery and margin normalisation remaining key monitorables.

Impact: Positive

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