L&T Q2 Profit Jumps 33% to Rs 5,202 Crore as Record Rs 1.48 Lakh Crore Orders Mask a Thinner Margin

Larsen & Toubro reported a 33% year-on-year rise in consolidated net profit for the September quarter after market hours on Tuesday, but the numbers underneath tell two different stories. The engineering and construction major is winning more work than ever, and its bottom line grew sharply, yet the money it makes from operations barely budged.

Net profit attributable to shareholders came in at Rs 5,202 crore for July-September 2026, against Rs 3,926 crore a year earlier. Revenue from operations climbed 16% to Rs 78,750 crore from Rs 67,984 crore. Basic earnings per share rose to Rs 37.81 from Rs 28.54.

Orders keep breaking records

The headline that management chose to lead with was order inflow. L&T booked Rs 1,47,665 crore of new orders in the quarter, up 28% from a year ago and another quarterly record. International contracts accounted for Rs 92,375 crore, or about 63% of the total, with the biggest wins coming from offshore and onshore hydrocarbon, the company's CarbonLite Solutions business, airports and public spaces, and power transmission.

That pushed the consolidated order book to Rs 8,53,514 crore as of September 30, up 15% since March. At the current revenue run rate, that backlog covers well over two and a half years of work, which is the multi-year visibility Chairman and Managing Director S N Subrahmanyan pointed to in his comments, despite what he called a constantly shifting geopolitical backdrop.

Overseas markets are now the core of the business. International revenue was Rs 45,870 crore in the quarter, or 58% of the total, and foreign projects make up 54% of the order book.

The margin question

Here is the part investors are likely to focus on. EBITDA rose only about 1% to Rs 6,845 crore from Rs 6,806 crore, even though revenue grew 16%. That squeezed the operating margin to roughly 8.7% from 10% a year earlier.

So where did the 33% profit jump come from? The gap between flat operating profit and fast-rising net profit points to items below the EBITDA line, such as other income, finance costs and tax, doing much of the lifting. Total income, which includes other income, rose to Rs 81,056 crore from Rs 69,368 crore, and profit before tax reached Rs 7,641 crore, up from Rs 6,922 crore in the June quarter.

Thinner margins at a company with a heavy mix of large fixed-price international contracts are not unusual early in a project cycle, when revenue is recognised before the more profitable completion phases. But it does mean the quality of the profit beat is weaker than the headline suggests, and analysts will want clarity on whether cost pressures from elevated crude and commodity prices are hurting execution margins.

Segments: energy leads

The conventional energy segment grew revenue 29% to Rs 17,285 crore, and green energy jumped 43% to Rs 11,493 crore. Infrastructure and utilities, still the largest single segment, managed only 6% growth to Rs 25,133 crore, which suggests domestic infrastructure execution remains slower than the energy-led overseas pipeline. Manufacturing and products rose 34% to Rs 4,480 crore.

Half-year picture and what's next

For the first half of FY27, revenue rose 11% to Rs 1,46,692 crore and net profit grew 24% to Rs 9,325 crore. Order inflow for the six months totalled Rs 2,55,678 crore, up 22%.

L&T shares had closed 0.4% lower at Rs 3,665.10 on the NSE before the results were announced, giving the company a market value of about Rs 5.04 lakh crore. Wednesday's trade will show whether the market rewards the record order book or punishes the margin slip.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.