Larsen & Toubro is bracing for mixed Q1FY27 financial results due to project execution delays caused by West Asia conflict
Brokerages project core engineering, procurement, and construction revenue to grow by 6% year-on-year
West Asia remains a critical market for the company, accounting for 33% of total revenue
L&T Q1 Results Preview: West Asia Conflict to Slow Execution, Flat Revenue Expected
West Asia remains an essential geography for L&T as it accounts for 33% of total revenue and forms 37% of the order backlog
L&T
Summary
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Larsen & Toubro (L&T) prepares to report mixed financial results for the first quarter of financial year 2026-27 (Q1FY27), as project disruptions stemming from the West Asia war weigh on execution.
Brokerage firms anticipate core engineering, procurement and construction (EPC) revenue to grow 6% year-on-year. This projection factors in execution delays from the US-Iran conflict and a sluggish rebound in local water contracts.
Brokerages anticipate single-digit annual growth for overall top-line figures, constrained by macroeconomic headwinds and elevated expenses.
West Asia remains an essential geography for the engineering major. The region accounts for 33% of total revenue and forms 37% of the order backlog.
The company had previously warned of near-term challenges. In March, L&T stated that while operations, billing and new orders were stable, supply chain bottlenecks alongside escalating input and insurance costs remained pressing concerns.
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Motilal Oswal Financial Services (MOFSL) expects L&T to report consolidated revenue of ₹64,335 crore for the April-June quarter. This marks a marginal 1% increase from the previous year but a steep 22.3% drop sequentially.
The brokerage projects a net profit of ₹3,835 crore. The figure represents a 6% year-on-year rise alongside a 28.5% quarter-on-quarter decline.
Analysts expect operating performance to remain under pressure. MOFSL estimates earnings before interest, taxes, depreciation and amortisation (EBITDA) at ₹6,250 crore. This translates to a 1.1% fall year-on-year and a 27.4% sequential contraction. The firm has retained a 'Buy' rating on the stock.
Kotak Institutional Equities projects core EPC revenue growth at 6% year-on-year amid West Asia-linked disturbances. The brokerage observed that overseas project sites are currently mitigating disruptions by utilising existing inventories, which limits the immediate operational impact.
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Kotak estimates L&T will post total revenue of ₹69,500 crore, up 9.1% from the previous year but down 16% sequentially. Kotak expects adjusted profit after tax to grow 12.6% year-on-year while contracting 22.5% from the preceding quarter.
The brokerage projects EBITDA to reach ₹6,746 crore. This reflects a 6.8% year-on-year expansion, countered by a 21.6% sequential drop, signalling a softer operational quarter compared with the previous three months.