L&T shares tumble around 12% in 2 sessions; m-cap drops by ₹70,000 crore amid West Asia conflict

Shares of Larsen & Toubro, the country's largest infrastructure developer, fell for a second straight session on Wednesday, March 4. The stock has plunged as much as 11.73%, in the last two sessions, to hit an intraday low of ₹3,776 and its market cap has come down by nearly ₹70,000 crore to ₹5.19 lakh crore data from the National Stock Exchange showed.

Larsen & Toubro came under selling pressure after geopolitical tensions in Middle East flared up after United States and Israel attacked Iran prompting Iranian retaliatory strikes around the Gulf. Larsen & Toubro has significant exposure and business interest across the Gulf and Middle Eastern region.

Global investment bank Macquarie in a note said that 37% of L&T's order book came directly from the Middle East region at end of the third quarter along with 33% order intake in the first nine months of current financial year.

L&T’s Gulf order book is based on fixed-price contracts, heightening vulnerability to cost escalations amid geopolitical tensions and commodity volatility in the region. Analysts at Macquarie flagged that evolving scenarios in the Gulf could weigh on execution margins, although it said that quantifying the precise impact remains difficult at this stage.

CLSA’s analysis suggests that a potential blockade of the Strait of Hormuz for the entire month of March could shave about 1.8% off L&T’s consolidated earnings per share (EPS). The estimate highlights the sensitivity of the company’s Middle East exposure to regional instability.

CLSA said that the company is the cheapest large-cap India industrial stock at current juncture, arguing that market weakness is driven largely by cyclical concerns around the Middle East rather than structural deterioration.

L&T has navigated past crises by shifting focus across geographies — from Indian government capex cycles to Middle East projects and subsequently to Europe and India’s private sector capex. This diversification strategy helped the company post an 18% year-on-year growth in order inflows in Q3FY26, even as new Middle East orders fell 70% YoY during the quarter, CLSA noted.

The company’s consolidated order backlog stands at approximately $81 billion, up 30% year-on-year, offering visibility and stability despite regional headwinds. Analysts at CLSA also expect domestic execution to improve going forward, particularly as the impact of excessive monsoons eases.

L&T Q3 earnings

L&T in January reported a 4.29% decline in its consolidated net profit at ₹3,926 crore for the quarter ending December 31 of the financial year 2025-26. The infrastructure major had seen a profit of ₹3,359 crore in the same quarter of the previous fiscal year.

The total consolidated PAT for the quarter at ₹3,215 crore includes a one-time material provision of ₹1,191 crore (net of tax & NCI) towards employee benefits arising from the implementation of the new labour codes which has been classified under Exceptional Items.

L&T’s revenue from operations for the quarter under review was at ₹71,450 crore, marking a growth of 10.49% from ₹64,668 crore reported in the third quarter of FY25. This was driven by steady execution progress across the various businesses within the Projects & Manufacturing (P&M) portfolio, the firm said. Its international revenues were ₹38,775 crore, constituting 54% of total revenues.

As of 10:21 am, L&T shares traded 7% lower at ₹3,785, underperforming the NIFTY50 index which was down 2.15%.