Larsen & Toubro (LT) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 order inflows surged 45% year-over-year to ₹1,158 billion, with robust activity in India and the Middle East; order book reached ₹6,670 billion, up 31% year-over-year, and international orders comprised up to 59%.

• Group revenues for Q2 FY26 were ₹680 billion, up 10% year-over-year, with consolidated PAT at ₹39 billion, up 16% year-over-year; H1 FY26 revenue grew 13% to ₹1,317 billion and PAT rose 22% to ₹75 billion.

• Strategic partnerships and MoUs were signed in renewables, green energy, defense, and semiconductors; in-principle agreement for Hyderabad Metro SPV divestment reached.

• Sustainability-linked $700 million trade finance facility secured, aligning with international ESG standards.

• In-principle agreement for Government of Telangana to acquire Hyderabad Metro SPV, with transaction expected by fiscal year-end and impairment charge taken.

Financial highlights

• Q2 FY26 group revenues at ₹680 billion, up 10% year-over-year; H1 FY26 revenue at ₹1,317 billion, up 13%; international revenues comprised up to 56%.

• Consolidated PAT for Q2 FY26 at ₹39 billion, up 16% year-over-year; H1 FY26 PAT at ₹75 billion, up 22%.

• Group EBITDA margin (excluding other income) at 10% in Q2 FY26, down from 10.3% last year.

• Net working capital to revenue ratio improved to 10.2%, a 200 bps improvement year-over-year.

• Return on equity rose to 17.2%, up from 16.1% year-over-year.

Outlook and guidance

• Confident of exceeding full-year FY26 guidance of 10% growth in group order inflows; maintains full-year revenue growth guidance at 15%, expecting stronger H2 execution.

• P&M business EBITDA margin target of 8.5% for FY26 reaffirmed; working capital guidance remains at around 12% by March 2026.

• Strong prospect pipeline of ₹10.4 trillion, up 29% year-over-year, led by infrastructure and hydrocarbons.

• Company focused on leveraging emerging opportunities, investing in new businesses, and ensuring sustainable growth.

• India GDP growth projected at 6.5%-7% for FY26, with robust domestic fundamentals.