L&T revenue rises 15.84%, but operating margin falls to 8.69%
Costs grew faster than revenue, while lower interest and tax rates supported a 27.17% year-on-year rise in net profit.
Filed 27 Oct 2026, 17:13 IST · after market close · Larsen & Toubro Ltd (LT)
Key takeaways
- Consolidated revenue grew +15.84% YoY, but expenses grew faster at +17.54%, pushing operating margin down 1.32 percentage points.
- Net profit grew +27.17% YoY despite operating profit growth of only +0.56%, aided by other income equal to 30.49% of pre-tax profit and a 3.57-percentage-point lower tax rate.
- Operating margin fell to 8.69%, 2.25 percentage points below the 10.94% median for 37 reporting Industrials peers.
Price around the results
Revenue growth did not translate into operating profit
Larsen & Toubro's consolidated revenue grew +15.84% YoY to Rs 78,749.94 cr, but operating profit increased only +0.56%. Sequentially, revenue rose +15.91% while operating profit grew +11.91%, so profit conversion still lagged sales growth. The gap points to weaker operating leverage rather than a lack of top-line momentum.
Higher costs and non-operating income shaped profit
Expenses grew +17.54% YoY against revenue growth of +15.84%, narrowing operating margin by 1.32 percentage points; sequentially, costs also grew faster than revenue and cut margin by 0.31 percentage points. Other income contributed 30.49% of pre-tax profit, making it a material support to reported earnings. Net profit was further aided by the tax rate falling 3.57 percentage points YoY to 22.49%, while interest expense declined 38.00%.
Margin has declined for two consecutive quarters
Operating margin fell from 10.40% in Q4FY26 to 9.00% in Q1FY27 and 8.69% in Q2FY27. The latest margin was 2.25 percentage points below the 10.94% median among 37 Industrials peers that had reported the quarter. This makes the sequential margin decline part of a broader recent deterioration, not a one-quarter move.
Results were filed after market close
The results were filed after market close, so there is no post-results market move to assess yet. After its previous eight results, the stock rose seven times and fell once, with a median absolute move of 3.66%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹78,750 cr | ₹67,942 cr | +15.91% | +15.84% |
| Other income | ₹2,340 cr | ₹2,382 cr | -1.75% | +70.18% |
| Expenses | ₹71,905 cr | ₹61,825 cr | +16.30% | +17.54% |
| Operating profit | ₹6,845 cr | ₹6,116 cr | +11.91% | +0.56% |
| Operating margin (%) | 8.69% | 9.00% | — | — |
| Interest | ₹473 cr | ₹539 cr | -12.20% | -38.00% |
| Depreciation | ₹1,037 cr | ₹1,032 cr | +0.45% | -5.02% |
| Profit before tax | ₹7,675 cr | ₹6,927 cr | +10.79% | +21.31% |
| Tax | ₹1,726 cr | ₹1,939 cr | -11.01% | +4.66% |
| Net profit | ₹5,949 cr | ₹4,988 cr | +19.27% | +27.17% |
| EPS (₹) | ₹37.81 | ₹29.97 | +26.16% | +32.48% |
Operating margin of 8.69% compares with a Industrials sector median of 10.94% across 37 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 8.69% after two consecutive quarterly declines.
- Whether expenses continue to grow faster than revenue, versus +17.54% and +15.84% YoY in Q2FY27.
- How other income's 30.49% share of pre-tax profit and the 22.49% tax rate change next quarter.