Larsen & Toubro (LT IN) – Q3FY26 Result Update – Execution remains key amid retained guidance – BUY
Published on 29 Jan 2026
Larsen & Toubro (L&T) reported consolidated revenue growth of 10.5% YoY, while EBITDA margin expanded by 71bps YoY to 10.4%. Infrastructure projects delivered healthy execution internationally, while domestic execution was impacted by headwinds in central-funded water projects. Energy projects continued to see strong execution; however, cost overruns in select hydrocarbon projects weighed on margins, which are expected to remain soft over the next 2-3 quarters. In Hi-tech manufacturing, an execution ramp-up in Precision Engineering drove growth, while L&T’s participation in the 87 MALE drone procurement program with its technology partner, General Atomics, further strengthens its growth prospects. Management remains optimistic, supported by an anticipated pickup in private capex, an improving share of private-sector opportunities (~35% of domestic infrastructure prospects), and expansion into new verticals such as data centers, semiconductors, and electrolyzers, while reiterating its ~15% YoY revenue growth guidance and ~8.5% P&M margins for FY26. We maintain our ‘Buy’ rating valuing the core business at a PE of 22x Sep’27E (same as earlier) arriving at a SoTP-derived TP of Rs4,806 (Rs4,766 earlier).
