Larsen & Toubro shares are drawing attention ahead of the Union Budget presentation, as the engineering conglomerate's performance serves as a key barometer for India's infrastructure and industrial sectors. The company's significant presence across construction, energy, and technology projects makes its capex plans and order book trends crucial indicators for the sector's growth trajectory.

CFO Projects 10% Capex Growth

Larsen & Toubro's Chief Financial Officer R Shankar Raman is anticipating a 10% increase in capital expenditure outgo in the upcoming budget for FY27. Speaking to PTI, Raman expressed confidence in the government's spending plans, stating: "They will possibly go for a 10 per cent increase...that is what I am anticipating, but that's at a personal level."

No Resource Crowding Concerns

Despite concerns about sagging private capital expenditure growth, Raman dismissed fears of a 'crowding out' of resources due to high government spending. He emphasized that ample liquidity in the system will support such investments, indicating a positive outlook for infrastructure development. Raman highlighted that there is already a jump in the way large infrastructure projects are getting conceived, underlining that 'infrastructure has miles to go'. This perspective suggests continued opportunities for companies like L&T in the infrastructure space.

Budget 2025 Capex Allocation

The Budget 2025 demonstrated continued emphasis on capital spending with significant allocations for infrastructure development:

The government has been increasing the capex target at a slower pace, considering the medium-term fiscal consolidation path of the central government. However, the consistent upward trajectory in capital expenditure allocation reflects the government's commitment to infrastructure development.

Market Focus on Infrastructure Spending

L&T shares will remain in focus due to the company's direct correlation with government capex outlay and capital expenditure trends. The engineering giant's performance often sets the tone for the broader infrastructure sector, making investor attention on budget announcements particularly significant for the stock's movement.

Larsen & Toubro Limited has delivered a landmark performance in Q3 FY26, setting new records across key financial metrics and reinforcing its position as India's leading engineering and construction conglomerate. The company announced its financial results for the quarter ended December 31, 2025, showcasing exceptional growth momentum across all business segments.

Record-Breaking Order Inflow Performance

The company achieved its highest-ever quarterly order inflow, marking a significant milestone in its growth trajectory. This exceptional performance was driven by strong demand across multiple sectors and geographies.

The quarter's order inflow spanned multiple geographies and diverse sectors including Thermal Power, Hydrocarbons, Renewable Infrastructure, Transmission & Distribution, and Roads & Runways. International orders contributed significantly at ₹66,848 crore, representing 49% of the total order inflow.

Strong Revenue Growth and Profitability

Larsen & Toubro demonstrated robust execution capabilities with steady revenue growth and improved profitability metrics across its Projects & Manufacturing portfolio.

The company reported consolidated revenues of ₹71,450 crore for Q3 FY26, reflecting a 10% year-on-year growth driven by steady execution progress across various businesses. International revenues constituted 54% of total revenues at ₹38,775 crore, highlighting the company's strong global presence.

Nine-Month Performance Highlights

For the nine months ended December 31, 2025, Larsen & Toubro maintained its strong performance trajectory with consistent growth across all key parameters.

The nine-month performance was driven by several high-value order wins across Public Spaces, Commercial Buildings, Roads & Runways, Metro, Hydel & Tunnel, Transmission & Distribution, Renewables, Ferrous & Non-Ferrous Metals, Thermal BTG, and Hydrocarbon businesses.

Segment-Wise Business Performance

The company's diversified business portfolio delivered strong results across all major segments, with Infrastructure Projects and Energy Projects leading the growth momentum.

Infrastructure Projects Segment

Energy Projects Segment

IT & Technology Services Segment

Leadership Commentary and Future Outlook

Commenting on the results, S N Subrahmanyam, Chairman and Managing Director, highlighted the company's achievement in crossing the ₹1 lakh crore quarterly order inflow mark in the Projects & Manufacturing portfolio for the first time. He emphasized the company's commitment to sustainable execution, leveraging cutting-edge technology and integrating ESG principles into the business framework.

The management remains optimistic about maintaining pro-growth momentum through sustained capital expenditure, expecting additional policy thrust to strengthen domestic manufacturing and fiscal incentives to support India's digital and AI ecosystem deepening. The company is well-positioned to capitalize on emerging opportunities through its strategy of expanding geographical footprint, driving efficient execution, and strengthening services businesses.

Financial Services and Other Segments

The Financial Services segment reported strong growth with income from operations of ₹4,477 crore, reflecting 15% year-on-year growth. The total loan book stood at ₹114,285 crore as of December 31, 2025, showing 20% growth compared to ₹95,120 crore in December 2024.

The "Others" segment, comprising Realty, Industrial Valves, Construction Equipment & Mining Machinery, and Rubber Processing Machinery, delivered exceptional performance with customer revenues of ₹2,594 crore, registering 55% year-on-year growth primarily driven by higher handover of residential units in the Realty business.