Larsen & Toubro (L&T) shares have slipped 5% in the second quarter (Q2) of FY 2026‑27, falling to ₹3,929.90 per share on Wednesday, September 23, 2026, from ₹4,143.40 at the start of Q2 in July 2026. The decline reflects equity investors’ caution amid geopolitical uncertainties in the company’s key international market, the Middle East. NSE data shows a 5.1% drop, while the conglomerate’s Q1 operating profit fell 3% year‑over‑year to ₹6,116 crore and EBITDA margins contracted 90 basis points to 9% due to higher energy prices and supply‑chain disruptions.

Despite the geopolitical pressure and elevated oil prices that have weighed on operating profit and margins since the US‑Iran conflict began, L&T has secured total orders worth ₹1.48 lakh crore in Q2 so far. The company has received 14 orders from domestic and international firms, including a recent contract from ONGC on September 9, 2026. Major contracts are located in Mumbai, Kuwait, Dubai, Nigeria, Ethiopia, and involve companies such as Dangote Group, TenneT, ADNOC Offshore, and ONGC.

Analysts from Antique Stock Broking noted that the Middle East accounts for 36% of total inflows, while CLSA analysts highlighted that the two global energy price shocks have translated into L&T recording the highest‑ever quarterly order inflows in Q2 FY27. JP Morgan analysts predict that L&T is gearing up for growth, with steady execution in its Middle East business and India’s domestic capex push expected to accelerate. They foresee mid‑teens revenue growth and a 10‑20 basis‑point margin improvement annually.

The company’s management is focused on expanding into data centres, green energy, and electronic manufacturing, aiming to double defence revenues by 2031. CLSA analysts added that Middle Eastern countries are rushing to monetise reserves, increasing gas capex and providing another growth catalyst for L&T. They also noted that India’s massive capex to secure energy is driving L&T’s orders, with the FY31 plan covering AI, EMS, green tech, and chemistry.

Antique analysts expect L&T’s RoCE profile to remain comfortably above 25%, with future returns dependent on working‑capital trajectory and margins. The conglomerate’s market capitalisation stood at ₹5.40 lakh crore as of September 23, 2026. Over the last five years, L&T shares have delivered 122% returns to investors, and over 34% gains in the last three years. The stock rose 7.4% in the past year but was down 5% year‑to‑date in 2026.

In the long term, NSE data shows L&T shares have lost 4% in the last month and were trading 3.2% higher in the last five sessions. The company’s management remains focused on expanding into new areas, with a target of 12‑15% revenue growth and a 10‑20 bps margin improvement annually. The US federal government’s plan to invest $5 billion in rebuilding Middle East energy infrastructure, potentially matched by eight Middle Eastern countries, could further support L&T’s international operations.