Q3FY26 results: Labour code costs weigh on L&T's earnings growth

L&T Q3 profit dips 4% YoY due to Rs 1,191-cr Labour Codes provision; recurring PAT up 31% amid record order inflows and 10% revenue growth

Larsen & Toubro’s (L&T’s) consolidated profit attributable to owners of the company for the third quarter of 2025-26 (Q3FY26) declined by 4.28 per cent year-on-year (Y-o-Y) to ₹3,215.1 crore, mainly due to a one-time material provision of ₹1,191 crore arising from the implementation of the new labour Codes.

 

The engineering & construction-to-technology services conglomerate’s recurring profit after tax (PAT) for the quarter stood at ₹4,406 crore, up 31 per cent Y-o-Y, driven by higher consolidated revenue.

 

L&T’s consolidated revenue for Q3FY26 stood at ₹71,497 crore, up by 10.49 per cent Y-o-Y and steady execution progress across businesses within the projects & manufacturing (P&M) portfolio. The company, however, missed the Bloomberg analysts’ poll estimates for both revenue (estimate of ₹73,599 crore) and profit (estimate of ₹4,915 crore).

 

 

L&T’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the quarter stood at ₹7,417 crore, up 19 per cent Y-o-Y. Meanwhile, its Ebitda margin stood at 10.4 per cent, compared to the margin of 9.7 per cent in Q3FY25. Among other positives included record high order inflows and order backlog.

 

The conglomerate secured orders worth ₹1.35 trillion in Q3FY26, up 17 per cent Y-o-Y, across thermal power, hydrocarbons, renewable infrastructure, transmission & distribution, roads & runways. International orders stood at ₹66,488 crore, contributing 49 per cent to the total order inflow.

 

The company’s infrastructure projects segment recorded an order inflow of ₹61,876 crore in Q3FY26, up 26 per cent Y-o-Y, with international orders accounting for 55 per cent of the total order inflow in the quarter. In Q3FY25, customer revenues in this segment stood at ₹33,700 crore, up 5 per cent Y-o-Y — the growth was primarily driven by execution progress in international projects, but was offset by subdued performance in domestic water projects.

 

S N Subrahmanyan, chairman and managing director, L&T, said: “We have seen another landmark quarter for the company as we posted the highest ever quarterly order inflow. For the first time, quarterly order inflow in our P&M portfolio has exceeded the ₹1 trillion mark — a clear reflection of our capabilities and the inherent strength of our business model.”

 

L&T’s consolidated order book as of December 31, 2025, surpassed the ₹7 trillion mark to ₹7.33 trillion, a 30 per cent growth over December 2024. International orders constituted 49 per cent of the overall order book.

 

“This growth is driven by our unwavering commitment to provide sustainable execution, leveraging cutting-edge technology and seamlessly integrating ESG (environmental, social, and governance) principles into our business framework,” Subrahmanyan added.

 

Overall, in the first nine months of 2025-26 (9MFY26), L&T recorded consolidated order inflows of ₹4.57 trillion, up 30 per cent Y-o-Y. International orders stood at ₹1.91 trillion, contributing 55 per cent of the total order inflow.

 

Speaking on a media call on Wednesday, R Shankar Raman, president, whole-time director, and chief financial officer at L&T, said: “As far as domestic orders are concerned, growth in these orders and increased private sector investment have converged. We’ve seen order inflow growth in buildings and factories, which are largely private sector-led. There has also been growth in the onshore oil & gas business in India, and in the carbon-light segment.”

 

Raman added that this has resulted in the private sector share rising to close to 60 per cent from 40 per cent in the nine-month period, and has contributed to the 27 per cent Y-o-Y growth in domestic orders.