Larsen & Toubro Reports Mixed Q2 Results; Analysts Maintain Positive Outlook on Strong Order Book

Larsen & Toubro (L&T) announced its second-quarter fiscal year 2026 results, showing revenue of ₹67,983 crore, which fell short of the CNBC-TV18 poll estimate of ₹69,950 crore. Net profit was ₹3,926 crore, also slightly below the estimated ₹3,990 crore. The company attributed the execution challenges primarily to unseasonal monsoon rains.

EBITDA stood at ₹6,806.5 crore, marginally below the estimate of ₹6,980 crore, though margins remained stable at 10%, meeting expectations. A significant positive was the 54% year-on-year surge in new orders, driven by large energy sector projects and private capital expenditure in India. CLSA noted that this strong order inflow, along with new orders, margins, and working capital, met three out of four guidance parameters.

CLSA maintained its 'Outperform' rating with a price target of ₹4,320, while Citi retained a 'Buy' rating and ₹4,500 price target, highlighting strong core order inflows and expected momentum. Nuvama also kept a 'Buy' rating and raised its target to ₹4,680.

L&T has guided for a robust second-half pipeline of $114 billion, indicating 29% growth. Citi expects this momentum to continue, with $4.5 billion in Middle East orders already at L1 status (meaning they are the preferred bidder and expected to be won).

Impact This news is significantly positive for L&T and its investors. While the Q2 results missed estimates slightly due to external factors, the strong order book, positive analyst ratings, and management's reaffirmation of FY26 guidance suggest a favorable outlook. The anticipated pickup in execution in H2 and potential future triggers like the new five-year strategy plan and Hyderabad Metro resolution should support the stock. Rating: 8/10

Difficult Terms: EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It's a measure of a company's operating performance. OPM: Operating Profit Margin. It shows how much profit a company makes for each rupee of sales after deducting operating expenses. Basis Points: A unit of measure used in finance to describe small changes, typically in interest rates or percentages. 100 basis points equal 1 percent. L1 Status: In tendering or bidding processes, L1 (Lowest/Lesser 1) refers to the bidder who has offered the lowest price and is typically the most likely to win the contract.