At a Glance
Larsen & Toubro (L&T) just dropped a Q1 FY26 bombshell: order inflows jumped 33% to ₹94,453 Cr, revenue surged 16% to ₹63,679 Cr, and net profit rocketed 30% to ₹4,318 Cr. Add a ₹15,000 Cr offshore hydrocarbon order to the mix, and you have an EPC juggernaut flexing harder than a Bollywood action hero. Stock still trades at a lofty P/E 30.9x, but who’s complaining when the execution is this solid?
1. Introduction
If the Indian infrastructure story is a movie, L&T is the protagonist, the director, and the box office all rolled into one. It builds bridges, drills oil, codes software, finances deals, and still finds time to pay a 33% dividend payout. But here’s the kicker: order books bulge while FIIs quietly trim stakes. Should you cheer or fear?
2. Business Model (WTF Do They Even Do?)
- EPC Behemoth: Roads, metro rails, airports, defense – they construct everything short of your coffee machine.
- Hydrocarbons & Power: Massive contracts in Middle East & domestic refineries.
- IT & Financial Services: Mindtree + LTTS make sure they’re not just about concrete.
- Defence: Submarines, missiles, warships – because why not?
Roast: If diversification were an Olympic sport, L&T would have all the gold medals (and then build the stadium too).
3. Financials Overview
Q1 FY26 Key Metrics
- Revenue: ₹63,679 Cr (+16% YoY)
- EBITDA: ₹8,024 Cr (+15% YoY)
- PAT: ₹4,318 Cr (+30% YoY)
- EPS: ₹26.3
Comment: Margins stable at 13%, profit growth juiced by strong project execution.
4. Valuation
- P/E: 30.9x – expensive but justified by growth.
- P/B: 4.9x – market values L&T like a luxury brand.
- Fair Value Range: ₹3,200 – ₹3,700.
Investor Punchline: Premium pricing for premium execution – just don’t expect it to be cheap.
5. What’s Cooking – News, Triggers, Drama
- Mega Order: ₹15,000 Cr offshore hydrocarbon project from Middle East.
- Order Book: Record ₹94,453 Cr inflow in Q1.
- Capex & Buybacks: Management hints at steady investments, no wild splurges.
- Dividend: 33% payout keeps income investors smiling.
6. Balance Sheet
| (₹ Cr) | Mar 2024 | Mar 2025 |
|---|---|---|
| Total Assets | 3,39,602 | 3,79,114 |
| Borrowings | 1,16,322 | 1,32,409 |
| Net Worth | 86,359 | 97,656 |
Auditor Remark: Healthy equity cushion, but borrowings creeping up like uninvited relatives.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating Cash | 22,777 | 18,266 | 9,161 |
| Investing Cash | -8,048 | 2,179 | -15,489 |
| Financing Cash | -11,572 | -25,413 | 6,557 |
Remark: Ops cash halved in FY25; watch this metric closely – growth without cash is like gym without protein.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 17% | 17% | 16.6% |
| ROCE | 12% | 13% | 14.5% |
| OPM | 15% | 13% | 13% |
| D/E | 0.4x | 0.34x | 0.35x |
Verdict: Margins decent, leverage moderate, returns solid – this is how you do big cap right.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,83,341 | 2,21,113 | 2,55,734 |
| EBITDA | 27,166 | 28,758 | 34,335 |
| PAT | 12,531 | 15,547 | 17,673 |
Observation: Consistent double-digit growth – rare in this scale.
10. Peer Comparison
| Company | P/E | ROE | Order Growth |
|---|---|---|---|
| L&T | 30.9 | 16.6% | 33% |
| KEC Intl. | 37.7 | 12% | 42% |
| Kalpataru Proj. | 34.4 | 9.6% | 32% |
| IRB Infra | 28.1 | 5.9% | 14% |
Comment: L&T leads on execution and returns, peers either too small or too niche.
11. Miscellaneous – Shareholding
- FIIs: 19.3% (declining)
- DIIs: 43.5% (rising)
- Public: 36.9%
Sarcasm: FIIs are trimming, DIIs are bulking – it’s a gym where one’s cutting weight and the other’s bulking muscle.
12. EduInvesting Verdict™
L&T remains the crown jewel of India’s infra play. Despite high valuations, its order book, execution efficiency, and global diversification make it a core portfolio stock for long-term investors. Short-term cash flow issues and rising debt are minor blips.
SWOT
- Strengths: Market leader, diversified, robust order inflow.
- Weaknesses: High capex, working capital squeeze.
- Opportunities: Defence, energy transition, Middle East orders.
- Threats: Execution risks, global slowdown, interest rate hikes.
Final Word: The big dog of infra is still barking and biting. As long as India builds, L&T bills.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Larsen & Toubro Q1 FY26, L&T results, Infra giant, order inflow, EPC
