L&T shares recover a little after tumbling 7% amid Middle East tensions; check what Macquarie said

Geopolitical tensions in the Middle East intensified sharply from Saturday after coordinated military strikes by the United States and Israel targeted Iran, fuelling fears of a wider regional conflict.

The attacks resulted in the killing of Iran’s Supreme Leader, Ayatollah Ali Khamenei, dramatically escalating tensions and amplifying global economic uncertainty.

On Sunday, Israel launched another wave of strikes on Tehran, with Iran retaliating through fresh missile barrages. The rapid escalation has heightened concerns about broader instability in the region and its spillover effects on the global economy.

Financial markets have reacted nervously, with investors flocking to safe-haven assets such as gold, while crude oil prices have turned volatile amid concerns over potential supply disruptions and broader economic fallout.

L&T share price tanks; here is why

Shares of the infrastructure major L&T tumbled as much as 7% to hit a low of ₹3,975.40 on the NSE.

However, the stock saw some recovery from the day's lows but were still down around 5% lower.

The stock slid as Larsen & Toubro remains one of the largest Indian players in the Middle East, with significant business exposure to the region.

Macquarie flags execution and earnings risks for L&T amid Iran–US conflict

Macquarie, a leading global financial services firm, has highlighted key risks for Larsen & Toubro (L&T) in the wake of the escalating Iran–US conflict, citing the company’s significant exposure to the Middle East region.

According to news reports, it has warned of potential physical damage to infrastructure and hydrocarbon sites in conflict-hit areas, which could lead to project delays or even cancellations. Such disruptions may impact L&T’s large engineering and construction portfolio across the region.

Macquarie also flagged worker safety concerns as a critical risk factor. Possible evacuations or restrictions on workforce movement could disrupt execution timelines and slow project progress.

Additionally, the financial services firm cautioned about potential margin pressure arising from geopolitical uncertainty, cost escalations, and logistical challenges.

Net impact: Macquarie believes execution and earnings risks could rise materially if the conflict prolongs or intensifies, given L&T’s meaningful exposure to the Middle East.

About L&T

Larsen & Toubro (L&T) is a multinational engaged in EPC projects, high-tech manufacturing, and services. It operates in over 50 countries worldwide. A strong, customer-focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for over eight decades.

The company is engaged in core, high-impact sectors of the economy, and our integrated capabilities span the entire spectrum of ‘design to delivery’.

L&T's manufacturing footprint extends across eight countries in addition to India. L&T has several international offices and a supply chain that extends around the globe.