What Factors Contributed to L&T's 4% Drop in Q3 Profit?
Synopsis
Larsen & Toubro (L&T) faces a 4% drop in Q3 profit to Rs 3,215 crore due to a one-off expense from new labor laws. Despite this, the company's revenue rose 10%, showing strong order inflow. Explore how L&T navigates these challenges while maintaining robust performance.
Key Takeaways
L&T's profit fell 4% to Rs 3,215 crore due to a one-time expense from new labor laws.
Revenue increased by 10% , reaching Rs 71,450 crore.
Recurring profit after tax was Rs 4,406 crore , showing a significant 31% growth.
Consolidated order book surpassed Rs 7 lakh crore , marking a robust 30% growth.
International orders made up 49% of the total order book.
Mumbai, January 28 (NationPress) The prominent engineering and construction firm Larsen & Toubro (L&T) announced on Wednesday a 4% decrease in its consolidated net profit, reporting Rs 3,215 crore for the quarter concluding December 31, 2025 (Q3 FY26). This decline was primarily attributed to a one-time exceptional charge related to new labor regulations, despite robust revenue and order inflows.
The company disclosed a one-time provision of Rs 1,191 crore, after tax and non-controlling interest, associated with employee benefits due to the implementation of these new labor codes.
This charge was categorized as an exceptional item, impacting the profit figures for the quarter.
However, when excluding this one-off expense, L&T's performance was significantly stronger. The company recorded a recurring profit after tax of Rs 4,406 crore for the December quarter, achieving an impressive 31% year-on-year growth.
The revenue for the quarter surged 10% to Rs 71,450 crore, bolstered by consistent execution across its Projects and Manufacturing sectors.
L&T's operational performance also showed improvement, with EBITDA rising by 19% year-on-year to Rs 7,417 crore in Q3 FY26.
Order momentum was a major highlight for the firm. As of December 31, 2025, the consolidated order book reached Rs 7.33 lakh crore, reflecting a remarkable 30% increase compared to December 2024. International orders constituted 49% of the total order book.
Chairman and Managing Director S N Subrahmanyan referred to the quarter as a historic milestone for the company.
He noted that L&T achieved its highest-ever quarterly order inflow, with orders in the Projects and Manufacturing sectors surpassing the Rs 1 lakh crore threshold for the first time.
Consequently, the company's total order book has now exceeded Rs 7 lakh crore.
By segment, the Infrastructure Projects division reported order inflows of Rs 61,876 crore during the quarter, marking a 26% year-on-year increase.
International orders accounted for 55% of this inflow, driven by substantial contracts in power transmission, distribution, and renewable energy.
The Energy Projects segment secured new orders valued at Rs 46,049 crore, up 19% from the previous year.
This growth was supported by significant contracts in hydrocarbon, offshore wind, and CarbonLite solutions, with international markets contributing 43% of the segment's total order inflow.
Point of View
It's crucial to recognize that while L&T's profit has seen a decline, the underlying strength in revenue and order inflows highlights resilience in the construction and engineering sector. This performance reflects broader economic trends and challenges, serving as a significant indicator for investors and stakeholders. NationPress remains committed to covering these developments.
NationPress
9 May 2026
Frequently Asked Questions
Why did L&T's profit decline in Q3 FY26?
L&T's profit declined by 4% to Rs 3,215 crore due to a one-time exceptional expense related to new labor laws.
What was the revenue for L&T in Q3 FY26?
L&T's revenue rose by 10% to Rs 71,450 crore during the quarter.
How did L&T's order book perform?
As of December 31, 2025, L&T's consolidated order book reached Rs 7.33 lakh crore, reflecting a 30% growth year-on-year.
What factors contributed to strong order inflows?
Strong order inflows were driven by significant contracts in infrastructure, power transmission, and renewable energy sectors.
What was the recurring profit after tax for L&T?
L&T reported a recurring profit after tax of Rs 4,406 crore for the December quarter, marking a 31% year-on-year growth.
