Larsen & Toubro Limited reported a 12% increase in revenue to ₹2,85,874 crore for the financial year 2025-26, driven by record order inflows and improved profitability. The company’s recurring profit after tax (PAT) rose 18% to ₹17,238 crore, while the order book grew 28% to ₹7,40,327 crore. The Board of Directors has recommended a final dividend of ₹38 per share for the fiscal year, subject to shareholder approval.

The company’s net debt-to-equity ratio improved to 0.35:1 from 0.6:1 in the previous year, reflecting strengthened working capital management. Order inflows reached ₹4,35,590 crore, marking a 22% increase. These results were announced during the 81st Annual General Meeting held on June 5, 2026, where the Chairman highlighted the commencement of the strategic journey 'Lakshya 2031' aimed at enhancing agility and digital capabilities.

Group Performance Overview FY 2025-26

Strategic Developments

The company advanced its new-age businesses, including Larsen & Toubro Vyoma, which partnered with NVIDIA to develop green AI data centers. L&T Semiconductor Technologies acquired power module design assets from Fujitsu General Electronics Ltd. in Japan. The Green Energy vertical is progressing on a 10 KTPA green hydrogen plant in Panipat and a 4 MW electrolyser stack in Hazira.

Value unlocking initiatives exceeded ₹8,300 crore through the divestment of non-core businesses like Hyderabad Metro Rail and Nabha Power. The company also launched India’s first listed Sustainability-Linked Bond worth ₹500 crore and a USD 700 million Sustainability-Linked Trade Facility. ESG targets include Water Neutrality by 2035 and Carbon Neutrality by 2040.

Citi has reaffirmed its Buy rating on Larsen & Toubro with a target price of ₹4,650, pointing to a combination of operational stability, a healthy order pipeline, and strategic corporate developments as key supporting factors.

Middle East Operations and Credit Risk

A central pillar of Citi's positive stance is the stability of Larsen & Toubro's Middle East operations. The brokerage characterises the credit risk associated with these operations as negligible, suggesting that geopolitical and macroeconomic uncertainties in the region have not materially impacted the company's business exposure or receivables quality in that geography.

FY27 Order Pipeline and Private-Sector Capex

Citi also draws attention to a strong FY27 pipeline for Larsen & Toubro, with the assessment explicitly excluding reconstruction projects. This distinction underscores the organic strength of the company's order book outlook. Complementing this, the brokerage notes an expansion in private-sector capital expenditure, with the thermal power segment identified as a leading driver of this trend. The following table summarises the key highlights from Citi's assessment:

Real Estate Business on Track for Public Listing

On the corporate development front, Citi notes that Larsen & Toubro's real estate business remains on course for a public listing within two years. This potential listing represents a significant structural milestone for the conglomerate, potentially unlocking value in one of its key business verticals.

Key Takeaways

• Citi maintains a Buy rating with a target price of ₹4,650
• Middle East operations are characterised by negligible credit risk
• FY27 order pipeline is described as strong, excluding reconstruction projects
• Thermal power is identified as the primary driver of expanding private-sector capex
• The real estate business is on track for a public listing within two years

Overall, Citi's maintained Buy rating reflects confidence in Larsen & Toubro's diversified business model, supported by stable international operations, a robust domestic order outlook, and value-unlocking initiatives within its real estate segment.