Valuation Offers Upside as

LT

Rides Investment Revival

remains well placed to deliver superior growth, supported by a record order book, strong pipeline, and favourable capex environment. With government and private-sector investments driving demand, and a strategic pivot towards complex, technology-intensive and green-energy projects, L&T is positioned to sustain growth momentum and improve profitability. Valuations have corrected, offering a more attractive entry point. Q3FY26 Performance Highlights - Revenue growth: +10% YoY, led by energy (+15%) and IT services (+12%); infrastructure lagged with mid-single digit growth due to delayed payments in water projects. - EBITDA margin: Expanded 70 bps YoY, driven by cost savings and efficiencies in core infrastructure. - Consolidated EBITDA: +19% YoY. - Profit before tax: +34% YoY, aided by lower interest and depreciation expenses. - Net profit: Declined 4% YoY due to exceptional charge of ₹1,344 crore (labour code provisions). Order Inflows & Pipeline - Record quarterly inflows: ₹1,16,419 crore (+18% YoY) in core projects & manufacturing. - Domestic inflows: +30% YoY, share rising to 53% of total. - International inflows: +7% YoY, driven by GCC infrastructure investments. - 9MFY26 inflows: +34% YoY; Q4 pipeline at ₹5,90,000 crore (₹4,00,000 crore infra, ₹1,25,000 crore hydrocarbon, ₹50,000 crore carbon lite). - Order book: ₹7,33,157 crore, ~3.9x FY25 revenues, ensuring strong visibility. Capex Environment - Domestic: Private capex share rose from 40% (9MFY25) to 60% (9MFY26), aided by greenfield investments and government incentives. - Overseas: GCC driving large-scale urban projects, AI infrastructure, and data centres. - Kuwait projects: Four oil projects temporarily halted; expected to be re-tendered, no impact on current order book. Valuation & Outlook - SOTP valuation: ₹4,341/share, ~14% upside. - With strong inflows, improving execution, and supportive capex trends, L&T offers a reasonable margin of safety and remains well positioned for medium-term growth.