L&T Q2 Preview: Strong earnings expected on healthy order flows, mixed project mix may cap margin

Larsen and Toubro is expected to announce its Q2FY26 earnings on October 29. Analysts expect earnings to be strong on robust order execution and healthy inflows though mixed project mix may keep margin expansion in check.

According to a Moneycontrol poll of 6 brokerages, Larsen & Toubro’s (L&T) consolidated revenue is expected to rise 15% year-on-year (YoY) to Rs 70,818 crore. The company’s profit after tax (PAT) is projected at Rs 3,990 crore, up ~17.5% YoY, while EBITDA margin is likely to remain broadly stable at 10%.

HDFC Securities is the most optimistic, projecting L&T’s net profit at Rs 4,200 crore, while B&K Securities is the most cautious, estimating PAT at Rs 3,642 crore. Other brokerages’ estimates fall between these levels, with revenue in the range of Rs 68,763–71,913 crore and EBITDA margins around 9.8–10.4%.
Key earnings drivers

Order Momentum
L&T’s growth is expected to be supported by strong order inflows and steady execution. According to Nuvama, the company has secured large-ticket orders across heavy civil infrastructure, power T&D, water, hydrocarbon, BESS, and bullet train projects. International projects, particularly in the Middle East, are likely to sustain momentum, while timely execution of mega-hydrocarbon projects remains a key earnings driver. Nomura expects core order inflows of Rs 67,750 crore, underlining the importance of execution in maintaining revenue visibility.

Margins Stable
Core E&C margins are expected to remain largely steady, though consolidated profitability may see some pressure. MOFSL expects Core E&C EBITDA margins to hold at 7.6% YoY, while consolidated margins may decline ~50bps. Kotak projects Core E&C margins improving to 8% YoY, driven by a larger share of hydrocarbon revenues, even as mega-hydrocarbon projects may not immediately be margin-accretive.

Project Mix Driving Growth
Analysts highlight that the mix of projects across hydrocarbon, infrastructure, and international markets will be a key growth driver. Kotak notes that a larger share of hydrocarbon projects in the revenue mix supports margin expansion, while MOFSL points to execution ramp-up in Saudi and GCC projects as critical. Nomura also flags that ultra-mega orders in the hydrocarbon segment provide revenue visibility and influence segmental profitability.

What Analysts Will Watch Out For
Investors will closely watch domestic order ramp-up, conversion of international prospects, and trends in the GCC order pipeline. Commentary on public capex and sector-specific policy developments will also be critical.

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