AI-generated · cited to primary sources · not investment advice
Larsen & Toubro (500510) Oct 2025 Filing Analysis
Does management do what it says?
The acquisition was completed on June 9th, which is within Q1 FY26, ahead of the previously guided Q2 FY26 timeline. (1 exceeded across 1 tracked commitment)
“we are gearing up for taking up additional maybe 10, 15 gigawatts in the next 2, 3 years.”
The NWC to sales ratio improved significantly to 10.2% as of September 2025, well ahead of the 12% year-end target. (1 met, 2 exceeded across 3 tracked commitments)
“On Working Capital, our guidance for working capital for FY '26 remains unchanged at around 12% by March 2026.”
The company has secured Rs 945 billion in order inflows in Q1 FY26, representing 27.8% of the full-year target of Rs 3.4 trillion. (1 in progress, 1 revised, 2 exceeded across 4 tracked commitments)
“We are confident of exceeding our full year FY '26 guidance of 10% growth in group order inflows for the current year.”
Management remains confident in achieving the 8.5% target for the P&M business, despite current softness in Energy margins, due to expected execution pick-up in H2. (1 met, 2 in progress across 3 tracked commitments)
“With the execution momentum expected to pick up in H2, we are reasonably confident to achieve our full year EBITDA margin target of 8.5%.”
Management has reached an in-principle understanding with the Government of Telangana for the acquisition of its entire stake in L&T Hyderabad Metro. The government will pay Rs 2,000 crores for equity and assume Rs 13,000 crores of debt. (1 in progress across 1 tracked commitment)
“The contours of the final agreement are being finalized, and we expect this transaction to get consummated by the end of the current fiscal FY '26.”
See the full cited Management analysis of Larsen & Toubro
Where does growth come from?
The shift toward retail lending is steady and nearly complete. The retail book percentage reached 98% in H1 FY26, up from 96% in H1 FY25. (1 steady across 1 signal)
“Retail Book % H1 FY25 96% H1 FY26 98%”
See the full cited Future Growth analysis of Larsen & Toubro
What could break the thesis?
This risk is easing significantly as the Government of Telangana has agreed in principle to take over the debt and equity, which will lead to a divestment and removal of the asset from L&T's balance sheet. (1 easing)
“the Government will take over the Hyderabad Metro SPV by refinancing the current debt and acquiring the entire equity stake... we expect this transaction to get consummated by the end of the current fiscal FY '26.”
See the full cited Risk analysis of Larsen & Toubro
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