Larsen & Toubro Q2 FY27 Results (NSE: LT)
Signal: Margin pressure
The read
The quarter marks a clear order-cycle inflection, with record inflow of ₹1,47,665 crore, +28% YoY, and order book of ₹8,53,514 crore, but near-term earnings quality is less compelling because revenue grew 15.8% while EBITDA grew only 0.6% and margin fell 130bps to 8.7%; the prior quarter's 12% operating margin in the company history also points to continued execution-mix pressure.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | 78,749.94 crore | +15.8% | +15.9% |
| Net profit | 5,202.1 crore | +32.5% | |
| EPS | ₹37.81 | +32.5% | |
| EBIT margin | 8.7% |
P&L walk
Revenue accelerated to ₹78,749.94 crore, +15.8% YoY and +15.9% QoQ, but EBITDA was broadly flat at ₹6,845 crore, leaving margin at 8.7% versus 10.0% a year earlier; lower finance costs and higher other income supported PAT growth to ₹5,202.10 crore, +32.5% YoY.
Segments
Energy - Conventional was the main growth engine, with customer revenue up 29% YoY to ₹17,285 crore and order inflow more than doubling to ₹78,413 crore, while Development Projects dragged with nil revenue and a ₹16 crore EBIT loss; Manufacturing & Products also outperformed with revenue up 34% and margin rising to 15.7%.
Key positives
- Record order inflow reached ₹1,47,665 crore, +28% YoY, with the order book at ₹8,53,514 crore, +15% versus March 2026, providing multi-year revenue visibility.
- Energy - Conventional order inflow rose more than 100% YoY to ₹78,413 crore and customer revenue grew 29% to ₹17,285 crore.
- Manufacturing & Products revenue grew 34% to ₹4,480 crore and EBITDA margin expanded to 15.7% from 13.5%, supported by a more favourable project execution profile.
- Consolidated PAT attributable to owners rose 32.5% to ₹5,202.10 crore and EPS tracked PAT growth at 32.5%, indicating no material dilution signal.
- International revenue reached ₹45,870 crore, or 58% of group revenue, while international orders represented 63% of quarterly inflow.
Key concerns
- EBITDA grew only 0.6% YoY to ₹6,845 crore despite 15.8% revenue growth, causing EBITDA margin to contract 130bps to 8.7%.
- Infrastructure & Utilities margin fell to 5.7% from 6.2% on cost pressures and sales mix, while Energy - Conventional margin fell to 7.4% from 8.2% because of early-stage CarbonLite orders.
- Realty revenue declined 43% YoY to ₹225 crore and margin fell to 54.3% from 67.6% because of fewer residential handovers.
- Technology, Platforms & Services margin declined to 19.5% from 20.0% due to higher manpower cost and adverse forex variation.
Research and educational content only. Not investment advice.