L&T: the electrolyser factory is real, but hydrogen earnings

Larsen & Toubro (NSE: LT) is an engineering, procurement and construction company. Its green hydrogen operations run through L&T Electrolysers Limited, which manufactures alkaline electrolysers at Hazira, Gujarat, and L&T Energy GreenTech, which develops hydrogen projects. What happened: Q1 FY27 consolidated revenue rose 6.7% YoY to Rs 67,942 crore; PAT including joint ventures and associates grew 15.5% to Rs 4,988 crore. The Manufacturing and Products segment posted revenue of Rs 4,648 crore (+8.7% YoY) with segment profit falling to Rs 593 crore from Rs 646 crore; the segment also covers engineering and defence businesses, so electrolyser performance is not separately visible. L&T Energy GreenTech has a 25-year IOCL contract to supply 10,000 TPA of green hydrogen at Panipat and commissioned a 1 MW plant at Kandla Port. Hazira has indigenised over 85% of its supply chain and developed a 4 MW zero-gap electrolyser stack. Why it matters: NGHM’s competitive bids discovered hydrogen prices of Rs 387-397 per kg; these are procurement prices, not evidence of L&T’s selling price or margin. Only around 8,000 TPA had been commissioned nationally as of early 2026 against 8.62 MTPA of announced production capacity. What I am watching: First disclosure of electrolyser-segment revenue and margin, Panipat construction milestones, and whether IOCL offtake pricing covers L&T’s project costs. My stance: At 28.9x PE, L&T is valued on its broader engineering franchise, not on hydrogen earnings that are not in the financials. The Hazira plant and the IOCL deal are real. The key earnings test is converting them into disclosed, profitable revenue. I do not hold a position in Larsen & Toubro at the time of writing. This is not investment advice.