Larsen & Toubro (LART.BO): A structural beneficiary of the Saudi resilience-led capex wave; Buy

Research evidence excerpt

Larsen & Toubro (LART.BO): A structural beneficiary of the Saudi resilience-led capex wave; Buy

Goldman Sachs Larsen & Toubro (LART.BO)

Why the GCC Capex Wave Matters for L&T

Larsen & Toubro (L&T) has significant exposure to the Middle East, which has become a

primary driver of its international business. As of FY26 end, Middle East accounted for

40% of its total orderbook (36% of order inflow in FY26).

1. Direct exposure to the renewables & clean hydrogen build-out (~$55–96bn sector

scope): L&T is the primary EPC contractor for the NEOM Green Hydrogen Company

(NGHC) — the world’s largest single-site green hydrogen plant, representing an ~$8.4bn

investment. Saudi Arabia’s target of up to 130GW of renewable capacity and up to

1mtpa of hydrogen capacity by 2030 implies a sustained pipeline of solar, wind, and

battery storage projects where L&T’s full-stack EPC capabilities position it as a natural

execution partner. ACWA Power is responsible for developing ~70% of the Kingdom’s

renewable energy capacity for Vision 2030 and has signed an MOU with L&T for the

Renewables & Grid scope of the Yanbu Green Hydrogen Hub. We believe L&T’s

incumbency on NGHC and its broader regional solar portfolio create a compounding

advantage: each completed project strengthens its local execution track record,

deepens its supply chain relationships, and improves its positioning for subsequent

awards.

2. Resilience-led capex prioritization favors execution-ready partners: There is a

decisive shift in Saudi investment strategy from broad-based giga-project spending

toward disciplined, resilience-aligned deployment. Projects are being reprioritized by

importance, deliverability, and return. For L&T, this is directionally positive. The