Larsen & Toubro Limited

Q1 FY27 group revenue was INR 679 billion, up 7% YoY. Group PAT was INR 41 billion, up 14% YoY. Group EBITDA margin, excluding other income, was 9% versus 9.9% in Q1 FY26; PP&M EBITDA margin was 7%, down 20 bps YoY. PP&M revenue was INR 462 billion, up 2% YoY. Order inflows were INR 1,080 billion, up 14% YoY; PP&M order inflows were INR 860 billion, also up 14% YoY. The order book was INR 7.79 trillion, up 27% YoY. Management reiterated FY27 guidance: 10%-12% revenue growth, 10%-12% order inflow growth, PP&M margin around 7.8%, and working capital around 10%.

No separate CEO spoke on the call; the lead strategic commentary came from CFO P. Ramakrishnan and DMD Subramanian Sarma. Management emphasized that L&T’s diversified portfolio and strong execution pipeline are helping it navigate geopolitical and supply-chain volatility. They also highlighted Lakshya 2031-driven portfolio realignment, the growing offshore wind franchise in Europe, and continued focus on capital allocation and cash generation.

Ramakrishnan said group EBITDA margin excluding other income was 9%, down from 9.9%, mainly because of lower PP&M execution, FX variation in IT subsidiaries, and higher ECL provisions. He quantified ECL provisions at about INR 2.5 billion and said Hyderabad Metro contributed a INR 0.38 billion loss in April, with Nabha/Metro treatment also affecting depreciation sequentially. He noted collections excluding financial services were INR 658 billion, cash flow from operations excluding financial services was INR 43 billion, NWC to sales improved to 4.9% from 10.1% a year ago, and GWC to sales improved to 51.1% from 53.9% in March 2026. He also said other income was mainly driven by cash generation, but should not be treated as a new permanent run-rate.

Analysts focused on Middle East execution risk, cost escalation, ECL provisions, and whether awards could slip. Management said Q1 was not materially hit in hydrocarbons because many projects were still in engineering/procurement, but solar and some construction-heavy projects faced supply-chain disruption; they are working with customers on cost pass-throughs and alternative routes, and do not expect major delays in the prospect pipeline. On the European offshore wind win, Sarma said the latest award extends an existing framework and that the projects will be built largely in India with a 4-5 year execution window. On ECL and water-related collections, Ramakrishnan said the higher charge was largely tied to aging and legacy India water projects, and should not repeat at the same level through the rest of the year.