L&T Q2FY27 performance update:
Strong execution but margins compressed: Revenue growth of 16% to Rs 78,750 crore beyond our expectations of 8% growth. Net profit was up by 33% to Rs 5,202 crore, led by 30% growth in other income. Operating profit just remains flattish with margins growth of 0.6% yoy indicating margins slippage of 128bps to 8.7% which is below our expectations of 9.2%. Execution was mixed across business divisions. The largest segment, Infrastructure & Utilities, generated revenue of Rs 25,554.23 Cr, up 6.0% from a year earlier, but its profit margin softened to 4.5%. Faster-growing units like Energy - Green, where revenue grew 42.9% to Rs 11,493.93 Cr, were not large enough to lift group margins.
Order inflows and book: New order inflows were highest ever at Rs 1.47L crore growing by 28% yoy. The highest ever order inflows were also due to slippage of orders from Q1 to Q2. Order book stands strong at Rs 8.5L crore up 15% from June 2026 levels. International projects represent 54% of the order backlog.
Valuation: The stock trades at about 28 times earnings. That multiple reflects the safety of a record Rs 8,53,514 Cr order book. Margin recovery will be the key monitorable.
