L&T share price drops as FY26 growth seen at 10-12%

Market snapshot: L&T slides on earnings and risk warning

Shares of Larsen & Toubro (L&T) fell to their lowest level in more than three weeks after the company reported a decline in quarterly earnings and warned that the conflict in the Middle East could weigh on revenue growth in the current financial year. In early trade, the stock fell as much as 3.5% to around Rs 3,900. The move put the focus back on how geopolitical disruptions can affect execution, costs, and the pace of order flows for engineering and construction companies.

The weakness was not limited to a single session. In another sharp intra-day move cited in the provided data, L&T fell 7% to Rs 3,960.20 on the BSE, described as its steepest intra-day decline in 11 months. At 10:13 AM on that day, the stock was down 5.4% at Rs 4,049.30 and was among the top losers.

What the company said about the Middle East impact

L&T flagged that challenges linked to the Middle East situation were expected to intensify over the next two quarters. The company also cautioned that the ongoing conflict would hinder revenue growth for the current fiscal year. On Tuesday (as referenced in the text), it guided for revenue growth of 10-12% for the year, indicating the pace would be “slightly slower.”

The same set of information also links the market’s risk-off mood to heightened geopolitical tensions. It notes that US and Israeli strikes on Iran increased concerns of a wider conflict, and that the rapid deterioration in regional stability pushed investors toward safe-haven assets. India and the Middle East are described as key markets for L&T, especially for its Projects and Manufacturing businesses.

Stock performance around the conflict

The stock’s declines were framed against the timeline of the Iran conflict. Since the onset of the conflict on February 28, L&T stock was down about 8.2%, while the Nifty 50 index fell 4.2% over the same period, based on the provided figures. Separately, the data also states the stock corrected about 11% from its all-time high of Rs 4,440 touched on February 24, 2026.

These data points underline how investors were reassessing near-term risks even as L&T is widely viewed as a bellwether for India’s infrastructure cycle. The stock’s movement also reflects how quickly sentiment can shift when execution risk and geopolitical costs rise.

Earnings: quarterly profit decline and estimate misses

The information provided contains multiple quarterly data points from different reports and time references.

One Reuters item states L&T announced a 3.1% decline in quarterly earnings (reported the previous day relative to the market reaction). Another Reuters report dated January 28, 2026 says the company’s consolidated profit after tax for the quarter ending December 31 fell 4% year-on-year to Rs 3,215 crore, versus analyst expectations of Rs 4,408 crore (44.08 billion rupees).

A separate set of numbers in the text, linked to a post-earnings market reaction, states L&T reported consolidated profit after tax of Rs 2,947 crore (up 15% year-on-year) but still missed estimates of Rs 3,400 crore. In the same block, estimated revenue is cited at Rs 54,100 crore. Because the inputs present differing figures for profit and context, they are presented here as reported in the supplied material rather than reconciled into a single quarter.

Revenue and one-time labour code charge

For Q3 FY26 (October to December quarter), the supplied data states L&T’s revenue from operations rose 10.5% year-on-year to Rs 71,449.70 crore, but missed a poll estimate of Rs 75,011 crore. It also states the reported net profit of Rs 3,215 crore included a one-time exceptional cost of Rs 1,191 crore due to implementation of new labour codes.

This detail is important because it separates underlying operating trends from exceptional items. At the same time, the miss versus poll estimates highlights that the market was positioned for stronger numbers.

Margins and execution: what analysts flagged

Another Reuters excerpt says L&T faced difficulty expanding profit margins, with core margins in its infrastructure projects shrinking by 55 basis points in the third quarter to 7.15%, from 7.7% a year earlier. The decline was attributed to cost challenges in legacy projects nearing completion.

The same report notes L&T revised its full-year margin forecast to 8.25%-8.50% from 8.5%-9.0%. It also warned of slower domestic orders over the next two quarters due to India’s general elections, and pointed to potential increases in international logistics costs from disruptions in the Red Sea shipping corridor.

Broker actions: downgrades, targets, and long-term stance

Broker commentary in the text reflects a more cautious near-term view. Emkay Research downgraded the stock from “Buy” to “Add” and cut its target price to Rs 4,450 from Rs 4,800, citing execution challenges and margin pressures despite strong order inflows and backlog.

HSBC Global Investment Research said challenging geopolitical conditions may impede market share growth and expansion into new markets, adding that while execution supports a positive long-term view, there are risks to growth and margins in the near term. Another note cited in the provided content described the trade-off between growth, margins, and capital expenditure as a key challenge.

Key figures table

Timeline: how the story developed

Market impact: what investors are reacting to

The market reaction described in the supplied material centres on three factors. First is earnings disappointment, including profit declines and misses versus analyst or poll expectations. Second is margin pressure, particularly in infrastructure projects where cost issues in legacy contracts were cited. Third is uncertainty around execution and logistics as Middle East tensions spill into shipping routes and broader risk appetite.

The information also highlights investor sensitivity to near-term guidance changes. The company’s comment that FY revenue growth could be slightly slower, with a 10-12% range, coincided with the stock sliding to multi-week lows.

Conclusion: near-term risk focus remains high

L&T’s share price moves in the provided reports show how quickly macro and execution risks can overwhelm otherwise supportive factors like strong order inflows and backlog. The company has guided to FY revenue growth of 10-12% but warned that Middle East-related challenges could intensify over the next two quarters. With margin guidance also cut in one of the Reuters excerpts and logistics risks flagged, investors are likely to track updates on project execution, cost trends, and geopolitical developments in upcoming quarters.