Synopsis: Larsen & Toubro Ltd slid 7% as the Iran–Israel–US conflict intensified. With nearly half of its order book tied to the UAE and Saudi Arabia, the company faces heightened regional exposure and market uncertainty.
The shares of the Large-Cap company, specializing in Engineering, Procurement, and Construction (EPC) projects, Hi-Tech Manufacturing, and Services, are in focus after the shares fell by 7 percent in the day’s trade following the Iran war raises worries on Middle East exposure.
With a market capitalization of Rs. 5,57,810.48 Crores on the Day’s Trade, the shares of Larsen & Toubro Ltd declined by 7.4 percent, reaching a low of Rs. 3960.20 compared to its previous close of Rs. 4280.55.
What Happened
Larsen & Toubro Ltd fell 7 percent in the day’s trade, following the weekend outbreak of the Iran-Israel-US conflict. On the morning of Saturday, February 28, Israel and the US launched attacks on Iran, prompting Iran to retaliate by striking US naval bases in Bahrain, the UAE, and Kuwait.
The initial attacks reportedly led to the death of Iran’s Supreme Leader, Ali Khamenei. In response, Iran declared that “there are no red lines now, and everything is possible” and has since carried out multiple attacks across the Middle East and in Israel. The escalation has caused airspace closures, stranded travelers, and widespread disruption to work and daily life in the region.
The company, India’s largest infrastructure firm, has substantial Middle East exposure, with Rs. 3.6 lakh crore (49% of its consolidated order book) from international projects, over 80% of which comes from the UAE, Saudi Arabia, and the broader Middle East. In the first nine months of FY 2026, 37% of L&T’s order book and 33% of order inflows were linked to the region, according to JM Financial.
A Larsen & Toubro Ltd spokesperson said the Middle East is a key market for the company, with a long-standing presence across energy, renewables, infrastructure, and technology. The company is closely monitoring the situation, confirming that all employees, workers, and assets in the region are safe.
Its management committee receives real-time updates from on-ground teams, partners, and local authorities. As a precaution, L&T has issued a travel advisory to avoid non-essential movement and is staying in constant touch with clients while following government guidelines. L&T’s most recent order win was worth up to Rs. 10,000 crore in the Middle East and India.
Financials
The company’s revenue rose by 10.49 percent from Rs. 64,668 crores in December 2024 to Rs. 71,450 crores in December 2025. Meanwhile, Net profit declined from Rs. 3,974 crores to Rs. 3,825 crores in the same period.
The company demonstrates strong financial performance, with a Return on Capital Employed (ROCE) of 14.5% and a Return on Equity (ROE) of 16.6%, indicating efficient utilization of capital and equity to generate profits. Coupled with a consistent dividend payout ratio of 33%, the company balances rewarding shareholders while retaining earnings for growth, reflecting both profitability and prudent financial management.
As of 31st December 2025, L&T’s total order book reached a massive Rs. 733,200 crore, reflecting a 30% year-on-year growth. International orders accounted for 49% of the total, supported by a robust near-term opportunity pipeline of approximately Rs. 5.9 trillion.
The Infrastructure segment was the largest contributor, representing a commanding 58% share, or around Rs. 425,256 crore, followed by the Energy segment with a 34% share, approximately Rs. 249,288 crore. The Hi-Tech Manufacturing segment accounted for 5% of the order book, roughly Rs. 36,660 crore, while the Others category made up 3%, totalling around Rs. 21,996 crore.
This highlights that L&T’s primary focus and strength continue to lie in the Infrastructure and Energy sectors, which together represent more than 90% of the total order book.
From a geographical perspective, the order book as of Q3 FY26 reflects L&T’s strong domestic presence, with India contributing 51% of the total orders, approximately Rs. 373,932 crore. The Middle East remains the most significant international market, representing 37%, or around Rs. 271,284 crore. The Rest of the World (ROW) contributed the remaining 12%, amounting to about Rs. 87,984 crore.
This distribution underscores L&T’s balanced strategy, with a strong domestic base complemented by a significant international presence, enabling the company to tap global opportunities and diversify risks.
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