Private capex now substantial in order book: L&T chief S N Subrahmanyan

L&T eyes growth with record orders, rising private capex, $100 bn valuation, global projects, and a new strategy focusing on services, tech, and financial businesses

Larsen & Toubro (L&T), India’s largest engineering and construction company, is entering a “highly exciting phase,” Chairman and Managing Director S N Subrahmanyan said, citing record orders, reviving private sector capex, and a market value nearing $100 billion. 

“We are in a positive atmosphere,” Subrahmanyan said in an interview. “Barring any black swan events, with the government enabling reforms like goods and services tax (GST) rationalisation and private-sector capex reviving, the Indian economy is poised for strong growth — and so is L&T.” 

Subrahmanyan L&T’s order backlog  (order book) of over ₹6 trillion is equivalent to 2.5-3 years of sales. “These are quality contracts from credible clients, and this gives us the confidence to execute well and be selective about the projects we take on.” 

L&T has benefited from a surge in government infrastructure spending and a revival in private-sector capital expenditure. Orders are flowing in from sectors like steel, automobiles, and consumer products, while multilateral and public-sector projects continue to underpin demand. 

“Private capex, which was nearly zero during the pandemic, is now substantial in our order book,” Subrahmanyan said, citing new projects from steelmakers, automakers such as Hyundai, Toyota and Maruti, and consumer goods firms, including paint manufacturers, and chemical producers. Order inflows from international markets are also strong. 

  The upbeat outlook has propelled L&T group’s market capitalisation close to $100 billion, making it one of India’s most valuable conglomerates. Subrahmanyan highlighted that the group’s market value has grown 3.3 times, profit after tax 2.7 times, and cash flows threefold in recent years. “All of this ultimately belongs to shareholders,” he said. 

The firm is also strengthening its balance sheet. It is now net debt-free, with more than ₹50,000 crore in cash reserves. Subrahmanyan said the group maintains cash equivalent to six months of profit across businesses to safeguard against shocks, after the pandemic underscored the need for resilience. “The most important thing for an organisation is to take care of its people. We want to ensure salaries and obligations are never at risk, even in a crisis,” he said. 

L&T’s international business is gaining momentum, particularly in West Asia, where the company has secured large hydrocarbon and infrastructure contracts. Recent orders from Qatar Energy and Saudi Arabia include massive offshore platforms fabricated at its yards in India and Oman. “These are dream projects, the kind every engineer aspires to work on,” Subrahmanyan said, adding that hydrocarbons, power transmission, and renewables are now the focus areas overseas. 

At the same time, L&T is reshaping its portfolio. L&T Finance has been transformed into a near pure-play retail lender after divesting its mutual funds, wealth management, and infrastructure loan businesses.

 

With 98 per cent of its portfolio now in retail, the unit has “turned around” under a new leadership team, he said. L&T Mindtree, he added, has continued to win business despite geopolitical tensions with the United States, recently securing its largest order from Paramount. 

L&T Realty, backed by a land bank of about 80 million square feet, is also being scaled up. The business is expected to generate around ₹4,500 crore in sales this year and ₹800-900 crore in profit after tax. The group is considering an IPO once it consolidates multiple project subsidiaries into a single balance sheet. “I would prefer an IPO, but the board will take the final call,” Subrahmanyan said. 

Looking ahead, the company is preparing its “Lakshya 2031” strategy, which will chart its course for 2026-2031 after the previous plan was disrupted by the pandemic. A key focus will be accelerating growth in services businesses such as IT, technology, and financial services, which offer higher profitability and lower risk compared with traditional construction and manufacturing. Services currently account for about a third of profits and are expected to grow faster than projects. The group is also implementing artificial intelligence across its companies as part of its transformation.