L&T announces another order win but analysts cut estimates on middle east concerns, flag risks

Larsen and Toubro (L&T) Ltd. the infrastructure conglomerate has announced a "large" order win in an exchange filing on Wednesday, January 14.

Orders that range between ₹2,500 crore to ₹5,000 crore in value, are classified as "large" by Larsen & Toubro.

In an exchange filing, L&T said that its Heavy Civil Infrastructure business vertical has won the order from Torrent Energy Storage Solutions Pvt. Ltd. for the construction of India's biggest pumped storage project, the 3,000 Saidongar-1 pumped storage project in Raigad, Maharashtra. The PSP will have 10 units of 300 MW each.

L&T will be responsible design, engineering and execution of all civil and hydromechanical jobs associated with the project.

The order comes amidst analysts citing caution on L&T's order inflows citing concerns in the middle east, after MEED reported about Kuwait discussing order cancellations worth $8.7 billion. L&T clarified later that the order cancellations were not part of its order book.

During its conference call after its second quarter earnings, L&T had said that it had submitted the lowest bidder position on three of five bids in Kuwait, adding up to around $4.5 billion. It said all prices were above the budget, though it was the lowest bidder.

Here's what analysts are saying regarding the order cancellations:

JM Financial

The brokerage believes potential delay or cancellation of the bids may adversely impact L&T's order inflow. However, it still expects the firm to meet its order inflow growth guidance for the financial year 2026 of 10% from the previous

year. It has cut the core order inflow estimates by 5% - 6% for financial year 2026-2028.

These potential order cancellations could impact L&T's core Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for financial year 2028 by 3%, JM Financial wrote, adding that the 3% decline in the stock price on Tuesday largely factored in such a deferral.

Axis Capital

The brokerage said the Kuwait order cancellations signals a scale down in a 'win worthy' order prospect of $4.5 billion. The orders were 12% of L&T's core inflow estimate for financial year 2026 of for 3.34 lakh crore in the second half of this fiscal.

Axis Capital said outperformance beyond 10% consolidated inflow growth guidance in FY26 looks tough for the company at this juncture.

It added that oil prices below $60 per barrel for long could slow hydrocarbon, infrastructure and urban development capex in the Middle East.

UBS

UBS said the Kuwait orders were part of L&T's prospect pipeline and the lowest bidder status gave it high confidence on order conversion.

L&T has guided for 10% FY26 order growth compared to the consensus of 22%. UBS said it sees downside risk to consensus, which could potentially cap the near-term upside for L&T.

Shares of L&T are trading 0.4% lower on Wednesday, extending its losses for the fifth straight session at ₹3,874.7.

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