Larsen & Toubro plans to nearly double its order book to ₹15 lakh crore by FY31, driven by international growth. The company is shifting its revenue mix toward global markets to mitigate domestic execution delays and payment bottlenecks. Investors should watch how this geographic transition affects profit margins and the progress of new ventures like semiconductors and wind energy.
Larsen & Toubro has unveiled an ambitious growth roadmap, aiming to expand its order book to ₹15 lakh crore by the fiscal year 2031. The engineering conglomerate is actively adjusting its business strategy, looking to reduce its dependence on domestic projects that have faced operational hurdles in recent years. This strategic shift is designed to prioritize higher-margin, more predictable work in international markets, particularly the Middle East.
L&T Targets 60% Revenue from Global Markets
Management aims to increase the share of international revenue to 60% of the total within five years, down from the current 50% split between domestic and foreign work. Saudi Arabia is identified as the anchor for this international expansion, currently supporting a $30 billion portfolio. This pivot is a direct attempt to move away from the complexities of the Indian market, where management notes that large-scale infrastructure projects often encounter significant timeline inflation. Specifically, the company has observed execution delays of up to 25% in various domestic contracts due to land acquisition difficulties and evolving project requirements.
Domestic Execution Hurdles Lead to Strategy Shift
One significant change in L&T’s approach is its withdrawal from last-mile water supply initiatives, such as those under the Jal Jeevan Mission. The company cited recurring payment delays and frequent project stoppages as the primary reasons for this move. Instead of continuing in these segments, L&T is narrowing its domestic focus toward more stable and predictable infrastructure, such as desalination plants. This move is expected to improve cash flow management and reduce the risk of long-term capital being locked in stalled or payment-delayed projects.
Automation and New Growth Verticals
To address a structural workforce gap of approximately 60,000 employees, the company is intensifying its investment in automation and industrial technology. A new ₹300-crore automation center in Maharashtra has been established to serve as the hub for these efficiency-driving efforts. Simultaneously, the company is retooling its hiring strategy, moving away from high-volume entry-level recruitment to focus on specialized engineering talent.
Beyond traditional construction, L&T is dedicating resources to high-tech and sustainable energy sectors. The firm is currently investing roughly ₹100 crore in cash per quarter into semiconductor development. Furthermore, it is positioning itself to capture major energy infrastructure projects, including large-scale wind energy and subsea transmission lines that will connect markets as far as Morocco and the United Kingdom.
Investors should monitor the success of this geographic shift, as the company’s profitability will depend on its ability to maintain margins in international markets while successfully commissioning its new high-tech projects. Future updates on order execution rates and the impact of the semiconductor investment on the balance sheet will be key indicators of progress toward the 2031 target.