L&T Q1 results: Revenue and net profit likely to decline sequentially amid US-Iran conflict

Engineering and construction giant Larsen and Toubro Limited (L&T) will announce its June quarter earnings on Tuesday, July 28. According to experts, L&T could report weak earnings in the June quarter as net profit and revenue could decline sequentially mainly due to elevated costs and disruptions caused by the West Asia war.

The company’s consolidated revenue could see a single-digit rise of 1% to 3% YoY to ₹64,500 to ₹65,600 crore. However, revenue could fall by 20 to 22% on a sequential basis due to geopolitical headwinds, which impacted project execution, especially in the West Asia region which contributes over 30% of L&T’s revenue. L&T reported consolidated revenue of ₹63,679 crore in the same quarter of the last fiscal year and ₹82,762 crore in the previous quarter.

L&T could see 5% to 7% YoY growth in net profit in the range of ₹3,810 to ₹3,880 crore but could drop 22 to 25% QoQ. The company reported a net profit of ₹3,617 crore in Q1FY26, while it stood at ₹5,326 crore in the previous quarter.

During the June quarter earnings, investors will monitor the impact of the West Asia crisis on the company's order execution. Overall order book growth during the June quarter and segment performance are also key monitorable parameters.

Ahead of the Q1 result announcement, L&T shares are trading 0.5% lower at ₹3,806. L&T shares are down nearly 7% so far this year.

Technical outlook

Larsen & Toubro remains under pressure, trading below both the 20-day and the 50-day EMAs. The DMI setup also favours bears, with -DI above +DI and ADX near 28, indicating a reasonably strong downtrend.

Immediate resistance is placed at ₹3,860, followed by ₹3,988. On the downside, ₹3,722 is the key support. A sustained move below ₹3,722 may extend weakness, while a close above ₹3,860 would be the first sign of recovery.

Options outlook

For the 25 August expiry, the at-the-money (ATM) strike as of 27 July is 3,850 is priced at ₹213, implying an expected move of approximately ±5.6% by expiry.

Before we consider options strategies, let’s examine the historical price behaviour of Larsen & Toubro around its earnings over the past three years.

L&T options strategy

The implied move of ±5.6% opens up opportunities for both volatility and directional trades. Traders expecting a significant price swing can opt for a Long Straddle, buying both call and put options of the same strike and expiry. The strategy benefits if Larsen and Toubro move beyond the implied range of ±5.6%.

Meanwhile, those anticipating limited movement may consider a Short Straddle, which benefits if the stock stays within the ±5.6% band post-earnings.

For directional traders, a Bull Put Spread may be ideal for a breakout from the resistance zone, while a Bear Call Spread suits those expecting a breakdown below the immediate support zone.

Disclaimer:

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. We do not recommend any particular stock, securities, or trading strategies. The securities quoted are exemplary and not recommendatory. The stock names mentioned in this article are purely to show how to do an analysis.