L&T profit rises 15.51% as operating margin slips to 9.00%
Other income supplied 34.38% of pre-tax profit, while costs grew faster than revenue YoY and margin fell 0.92 percentage points.
Filed 28 Jul 2026, 17:18 IST · after market close · Larsen & Toubro Ltd (LT)
Key takeaways
- Consolidated net profit rose 15.51% YoY even as operating profit fell 3.18%, helped by a 76.52% increase in other income and a 31.08% fall in interest expense.
- Operating margin narrowed 0.92 percentage points YoY to 9.00% as expenses grew 7.78% against revenue growth of 6.69%.
- At 9.00%, Larsen & Toubro's operating margin was 5.64 percentage points below the 14.64% Industrials peer median across 23 reported companies.
Price around the results
Profit growth was led outside operations
Consolidated net profit increased 15.51% YoY despite a 3.18% decline in operating profit. Other income rose 76.52% and accounted for 34.38% of pre-tax profit, making it a material contributor to earnings quality. Interest expense fell 31.08%, partly offsetting the 1.79-percentage-point rise in the tax rate.
Costs outpaced revenue and cut margin
Revenue grew 6.69% YoY, but expenses grew faster at 7.78%, narrowing operating margin by 0.92 percentage points to 9.00%. Sequentially, revenue fell 17.91% while expenses declined 16.62%, so costs again fell more slowly than revenue and margin contracted 1.40 percentage points. This was the first margin decline after three consecutive quarterly increases, from 9.92% in Q1FY26 to 10.40% in Q4FY26.
L&T remains below the reported Industrials peer median
L&T's 9.00% operating margin was 5.64 percentage points below the 14.64% median for the 23 Industrials companies that had reported the same quarter. It ranked fifth from the bottom on this measure, placing the quarter's margin pressure in a wider sector context.
Results were filed after market close
The results were filed after market close, so there is no post-result share-price move to assess yet. Across eight recent result reactions, the stock rose seven times and fell once, with a median absolute move of 3.66%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹67,942 cr | ₹82,762 cr | -17.91% | +6.69% |
| Other income | ₹2,382 cr | ₹1,463 cr | +62.84% | +76.52% |
| Expenses | ₹61,825 cr | ₹74,152 cr | -16.62% | +7.78% |
| Operating profit | ₹6,116 cr | ₹8,610 cr | -28.96% | -3.18% |
| Operating margin (%) | 9.00% | 10.40% | — | — |
| Interest | ₹539 cr | ₹679 cr | -20.70% | -31.08% |
| Depreciation | ₹1,032 cr | ₹1,168 cr | -11.62% | -0.10% |
| Profit before tax | ₹6,927 cr | ₹8,226 cr | -15.78% | +18.37% |
| Tax | ₹1,939 cr | ₹2,093 cr | -7.33% | +26.43% |
| Net profit | ₹4,988 cr | ₹6,133 cr | -18.67% | +15.51% |
| EPS (₹) | ₹29.97 | ₹38.71 | -22.58% | +13.95% |
Operating margin of 9.00% compares with a Industrials sector median of 14.64% across 23 peers that have reported Q1FY27.
What to watch
- Whether consolidated operating margin holds at or above 9.00% after its 1.40-percentage-point QoQ decline.
- Whether expenses continue to grow faster than revenue, after the YoY gap was 7.78% versus 6.69%.
- The share of pre-tax profit contributed by other income after it reached 34.38% this quarter.