Rs64,000 crore erased in two days. An all-time high just last week. India’s biggest engineering company got caught in a conflict it didn’t start — but the fundamentals haven’t changed. Here’s what the numbers say.
On February 24, Larsen & Toubro touched an all-time high of Rs4,440. Four days later, US and Israeli strikes on Iran killed the Supreme Leader, shut the Strait of Hormuz, and erased roughly Rs64,000 crore in L&T’s market capitalisation in two sessions.
The stock plunged as deep as Rs3,760 intraday before recovering to around Rs3,883 today — still 12% off its peak, still pricing in a conflict whose duration nobody can predict. The question is whether the market has confused proximity to a war or is discounting a drop in order book.
L&T’s consolidated order book stood at Rs7.33 lakh crore as of December 2025 — up 30% year-on-year. The Middle East accounts for roughly 39-40% of that book, which sounds alarming until you consider that the company has diversified its country base across Saudi Arabia, Kuwait and Qatar, and its project mix across hydrocarbon — onshore and offshore — gas, renewables and transmission. A conflict centred on Iran does not automatically cancel such contracts.
Says Motilal Oswal, the company has “adequate risk management in place for existing contracts” and notes that “in the medium to long term, whenever oil prices have moved up, overall capex spending has also moved up in the GCC region, where LT has now created a strong position.”
The Growth Engine
International revenue has gone from 34% of total revenue in FY24 to 44% in FY25 to a striking 50% in just the first nine months of FY26. International order inflows contributed 51%, 57% and 53% of total inflows across FY24, FY25 and 9MFY26 respectively.
What the sell-off is also ignoring: domestic order inflows grew 29% year-on-year in 9MFY26 to Rs1.35 lakh crore, driven by thermal power projects, building and factories, domestic refineries and metals. Domestic inflows had been largely flat across FY23-25.
On the earnings side, the trajectory is higher. EPS is projected to grow from Rs129.7 in FY26 to Rs156.4 in FY27 to Rs183.5 in FY28 — compounding at roughly 19% annually. Return on equity climbs from 17.2% to 19% over the same period. Revenue is expected to cross Rs3.8 lakh crore by FY28 against Rs2.9 lakh crore this year.
Motilal Oswal sees the company’s growth outlook as underpinned by its “strong order book and prospects of healthy core PAT earnings over FY25-28.”
The Catch
Of course, the war risk is not trivial. Nearly 75% of L&T’s international order book sits in the Middle East, and with GCC airspace shut and Hormuz contested, near-term execution and margins on certain projects face genuine pressure. The IT subsidiaries — LTI Mindtree and L&T Technology Services — face AI-driven disruption entirely unrelated to the Gulf, adding a second structural headwind to consolidated valuations. The stock is trading nearly 30x FY26 earnings.
core PAT earnings over FY25-28E, we do believe that near-term headwinds persist on 1) international revenue, with the Middle East accounting for nearly 39-40% of its total order book as of 9MFY26; and 2) IT subsidiary’s valuations, which are getting impacted by AI-led disruption,” noted Motilal.
