Larsen & Toubro Q1 FY27 Results (NSE: LT)
Signal: Growth decelerated
The read
Q1FY27 shows a mixed performance: revenue growth decelerated to +7% YoY (from +15.5% in Q1FY26) and EBITDA margin contracted 90bps to 9.0%, yet PAT grew 14% YoY driven by a 31% YoY drop in finance costs (₹539 Cr vs ₹782 Cr). The order book remained strong at ₹7,78,954 Cr (+5% vs Mar'26), but execution headwinds in Infrastructure (Water) and Energy – Green (supply chains) held back top-line momentum. The divestment of Nabha Power and planned Hyderabad Metro exit, along with the proposed merger of L&T Power Development, signal continued portfolio simplification.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹67,942 Cr | 7% | |
| EBIT | ₹0 Cr | N/A | |
| Net profit | ₹4,123 Cr | 14% | |
| EPS | ₹0 | N/A | |
| EBIT margin | 9.0% |
P&L walk
Revenue grew 7% YoY to ₹67,942 Cr, supported by execution across Infrastructure, Manufacturing, and Technology segments; EBITDA fell 3% YoY to ₹6,116 Cr, with EBITDA margin contracting 90bps to 9.0% as total operational expenses rose 8% YoY, outpacing revenue. PAT rose 14% YoY to ₹4,123 Cr, benefiting from a 31% YoY decline in finance costs (₹539 Cr vs ₹782 Cr) and likely other income, offsetting lower operating profit.
Segments
Order inflow growth was driven by Infrastructure & Utilities (₹44,357 Cr, +121% YoY on large Residential/Building and Ferrous Metal orders) and Energy – Green (₹33,042 Cr, +58% YoY on Offshore Wind mega orders), while Energy – Conventional inflow plunged 90% YoY on a high base. Revenue growth was led by Energy – Conventional (+14% YoY, improved Hydrocarbon/CarbonLite execution) and Technology, Platforms & Services (+15% YoY, sustained IT&TS demand), partially offset by declines in Infrastructure & Utilities (-3% YoY, Water/Effluent execution challenges) and Energy - Green (-11% YoY, West Asia supply chain disruption). Margins were mixed: Infrastructure & Utilities EBITDA margin fell 40bps to 5.1% on mix and credit provisions; Manufacturing & Products margin dropped 230bps to 15.2% on sales mix change; Realty margin fell 1190bps to 36.9% on composition change; while Energy – Conventional and Energy – Green margins were roughly flat.
Key positives
- Consolidated PAT grew 14% YoY to ₹4,123 Cr, outpacing revenue growth, helped by a 31% decline in finance costs (₹539 Cr vs ₹782 Cr).
- Group order inflow surged 14% YoY to ₹108,014 Cr, with International orders at ₹60,702 Cr (56% of total); order book at ₹778,954 Cr (+5% vs Mar'26) provides long-term revenue visibility.
- Infrastructure & Utilities segment order inflows more than doubled YoY to ₹44,357 Cr on large Residential/Ferrous Metal wins; Energy - Green orders rose 58% YoY to ₹33,042 Cr driven by Offshore Wind mega orders.
- Technology, Platforms & Services segment delivered strong revenue growth of +15% YoY to ₹14,627 Cr, with EBITDA margin of 19.2% (nearly steady).
- Financial Services segment income grew 27% YoY to ₹5,042 Cr; PBT improved 31% to ₹1,236 Cr on loan book growth and healthy asset quality.
Key concerns
- Consolidated EBITDA margin contracted 90bps YoY to 9.0%, as total operational expenses (+8% YoY) grew faster than revenue (+7%).
- Infrastructure & Utilities segment revenue declined 3% YoY to ₹21,858 Cr due to execution challenges in Water & Effluent Treatment; its EBITDA margin fell 40bps to 5.1% on revenue mix and higher credit provisions.
- Energy - Green segment revenue fell 11% YoY to ₹5,607 Cr due to supply chain disruption from West Asia conflict in the Solar business.
- Manufacturing & Products EBITDA margin dropped 230bps YoY to 15.2% on unfavorable sales mix within the portfolio.
- Realty segment EBITDA margin contracted sharply by 1190bps to 36.9% due to change in sales composition, though revenue more than doubled.
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