L&T Q2 profit up 33% on healthy order inflow despite Iran war

Larsen & Toubro, seen as a barometer for India's infrastructure sector, reported a 33% rise in quarterly profit on Tuesday, driven by healthy order inflow and a recovery in Middle East business despite the ongoing regional war.

Order inflows rose 28% to 1.48 trillion rupees ($15.56 billion) in the quarter ended September with international orders making up 63% of the total.

Consolidated revenue rose 16% from a year earlier to 787.5 billion rupees, driven by accelerated progress in the various businesses in the projects, products and manufacturing portfolio. International revenue constituted 58% of overall sales.

Revenue in infrastructure and utilities, the firm's biggest segment, rose 6% from a year ago, helped by improving execution across the domestic private sector and international projects.

L&T operates energy businesses serving the oil, gas and renewable sectors, and technology services spanning IT, engineering services, digital platforms, data centres and semiconductor design. The company also has manufacturing and financial services units.

L&T expects revenue from its defence technology business, which develops drones and unmanned systems, to triple over the next five years as it expands capacity to tap growing opportunities in India's defence sector.

Profit rose to 52.02 billion rupees from 39.26 billion rupees a year earlier and EBITDA margin improved to 10% from 8.7% a year ago, amid a 38% drop in finance costs and a 5% fall in depreciation.

Analysts expect margins to improve from the third quarter of fiscal 2027 as higher-priced orders gradually replace legacy contracts affected by input-cost inflation.