Core segment weakness unfolds as expected: FY27E guidance remains unchanged as management remains cautiously optimistic; maintain Neutral

研报英文原文证据摘录

Core segment weakness unfolds as expected: FY27E guidance remains unchanged as management remains cautiously optimistic; maintain Neutral

Global Markets Research

Larsen & Toubro LART.NS LT IN 29 July 2026

EQUITY: ENGINEERING & CONSTRUCTION

Rating Remains NeutralCore segment weakness unfolds as expected

Target priceFY27E guidance remains unchanged as management Remains INR 3,940

remains cautiously optimistic; maintain Neutral

Closing price INR 3,832 28 July 2026Ordering momentum continued while core execution was 3% lower than our estimate

L&T’s core order inflows (OI) grew 14% y-y to INR0.9tn, which was 17% above our estimate, largely Implied upside +2.8%due to an ultra-mega offshore wind order, (disclosed on 28 July 2026). Order backlog (OB) stood at

INR7.8tn, (+27% y-y), with international order share at 52%. Revenue of INR679bn (+7% y-y) was - Market Cap (USD mn) 54,996.2

1%/+1% vs our/Bloomberg consensus estimates. Core revenue (+3% y-y), impacted by project ADT (USD mn) 100.9

execution stage and disruptions in the Middle East (ME), missed our estimate by 3%, which was

partly offset by services revenue (+16% y-y) being 2% above our estimate.

Relative performance chartAdjusted core EBIT 8% lower than our estimates

EBITDA of INR61bn (-3% y-y) was 6% below our and consensus estimates as EBITDA margin

dipped 92bp y-y to 9.0% due to revenue mix and higher provisions. Reported core EBIT stood at

INR30.3bn, (+2% y-y) aided by higher treasury income in overseas subsidiaries, which

management indicated was10-15% of total other income (~INR3bn). Excluding this, core EBIT was

INR27.3bn, 8% below our estimate. Non-core EBIT came in 9% ahead of our estimate. Recurring

PAT stood at INR41bn (+14% y-y), which was 5%/13% above our/consensus estimates.