Physical Address
Bengaluru, Karnataka
Table of Contents
Larsen & Toubro (L&T) stands as one of India’s foremost conglomerates, operating across a spectrum of industries. Its business interests span infrastructure and energy projects, water and waste treatment initiatives, hi-tech manufacturing, IT and technology services, financial solutions, real estate ventures, and defense manufacturing. With a reputation for exceptional quality and punctual project delivery, L&T’s expertise is recognized worldwide.
In recent times, the company has strategically expanded its focus to the Middle East Asia region, capturing significant orders for solar parks, transmission and distribution networks, refineries, and desalination plants. Moreover, the achievements of its subsidiary partner, LTIMindtree, in securing major deals in the Middle East further underscore its global outreach.
In addition to reinforcing its established sectors, L&T has boldly diversified its portfolio. The company has embraced newer frontiers such as fabless semiconductor development, B2B marketplaces, and data center infrastructure. Each project under the L&T banner guarantees uncompromised quality and adherence to deadlines, embodying the firm’s unwavering commitment to excellence.
Though some investors have raised questions over L&T’s growth potential, indicators suggest a bright future. The robust order books for the fiscal years 2023–24 and 2024–25 highlight a trajectory of continuous expansion, fueled by orders from both home and overseas markets. These insights point to a phase of significant growth and amplified achievements for the conglomerate.
The Historical Genesis of Larsen & Toubro
The journey of Larsen & Toubro began in 1938 when two visionary Danish engineers, Henning Holck-Larsen and Soren Kristian Toubro, arrived in Mumbai representing the Danish firm FL Smidth & Co A/S. Their ambition led to the establishment of a company that would grow to become an engineering giant. In 1940, L&T set up a modest manufacturing unit focused on engineering projects, soon branching out into ship repair and fabrication through its subsidiary, Hilda Limited, during the early 1940s.
By 1944, the company broadened its industrial scope with the incorporation of Engineering Construction and Contracts Limited (ECC). The following year saw productive collaborations with British manufacturers, as L&T diversified into producing hydrogenated oils, biscuits, soaps, and glass. It also played a pivotal role in marketing earthmovers manufactured by the Caterpillar Tractor Company of the USA within India.
Officially incorporated on February 7, 1946, L&T embarked on rapid country-wide expansion in the subsequent years, setting up a significant facility in Powai, Mumbai, between 1947 and 1948.
The 1950s marked a period of transformation with L&T’s public listing, reporting a sales turnover of ₹10.9 million—a figure that stood as a testament to its burgeoning reputation. The company’s portfolio grew with landmark projects, including work for Amul Dairy in Anand and the establishment of blast furnaces at the Rourkela Steel Plant in Odisha.
In 1975, a long-term partnership with ISRO began, where L&T supplied more than 300 rocket motor casings, reinforcing its status as an engineering innovator. Further diversifying its operations, the company entered the IT sector in 1996 by launching Larsen & Toubro Information Technology Limited and later broadened its financial services through L&T Financial Holdings (now known as L&T Finance) in 2008.
Leadership and Shareholding Insights
At the helm of Larsen & Toubro today is Mr. S.N. Subrahmanyan, the Chairman and Managing Director. His career at L&T began in 1984, starting as a Project Planning Engineer. Mr. Subrahmanyan holds a bachelor’s degree in civil engineering from the National Institute of Technology, Kurukshetra, and furthered his education with a postgraduate degree in management from the Symbiosis Institute of Business Management. He succeeded Mr. A.M. Naik, who led the company from 2003 until 2023 and now provides strategic guidance as Chairman Emeritus.
Alongside Mr. Subrahmanyan, an experienced Executive Committee manages various business verticals and group companies, ensuring that every arm of the conglomerate maintains its commitment to operational excellence and innovation.
The shareholding structure of L&T is notably diversified, with no predominant promoter stake. As of March 31, 2025, mutual funds hold 19.94% of the shares, while insurance companies—led by the Life Insurance Corporation of India (LIC)—account for 19.84%, with LIC itself owning 13.25%. Foreign Portfolio Investors possess 19.80% of the shares, and individual retail investors hold 18.88%. Finally, both the L&T Employees Trust and other trusts each represent 14.33% of the shareholding, reflecting a balanced and widespread investor base.
Business of Larsen & Toubro
Larsen & Toubro operates across a broad spectrum of industries, ranging from infrastructure and energy projects to hi-tech manufacturing, realty, and finance. The company also has significant stakes in construction and mining machinery, IT services, semiconductor initiatives, EdTech platforms, and B2B marketplaces. Certain subsidiaries reach a point of self-sustainability and are subsequently listed on stock exchanges, reflecting L&T’s commitment to strong, independent growth.
Infrastructure Projects
L&T’s infrastructure division is renowned for executing extensive engineering, procurement, and construction (EPC) projects. The segment caters to a diverse array of projects, including:
- Buildings & Factories
- Transportation Infrastructure
- Heavy Civil Infrastructure
- Power Transmission & Distribution
- Renewable Energy Installations
- Water & Effluent Treatment
- Minerals & Metals Processing
A striking feature of this segment is the high proportion of international business—61% of the company’s order book comes from abroad. In fiscal year 2025, the segment experienced a revenue growth of 15.2%, with international contributions rising from 30% in FY24 to 41% in FY25, and an operating profit margin of 6.4%.
Some of the most notable projects include:
- The Bahai (Lotus) Temple in New Delhi
- The Mumbai Trans Harbour Link
- The Riyadh Metro project
- The Mumbai International Airport
- The Mansourah Massarah Gold Project in the Kingdom of Saudi Arabia
- The Statue of Unity
- The Mumbai Coastal Road Project
- The 1.8 GWp Sudair Solar Power IPP Project in Saudi Arabia
- The Western Dedicated Freight Corridor
- The Narendra Modi Stadium in Ahmedabad
- The Pellet & Sinter Plant for Tata Steel at Jamshedpur and Kalinganagar
Current flagship projects comprise the Mumbai-Ahmedabad High Speed Rail Corridor and the Navi Mumbai International Airport. In addition, L&T has commissioned 4.3 GWp of solar energy capacity in the Middle East Asia region. Supporting the growth of this segment, the Union Budget for FY25-26 allocates significant funds—₹2.87 lakh crore for Road Transport & Highways, ₹2.65 lakh crore for Railways, ₹20,000 crore for the Nuclear Energy Mission, and ₹30,000 crore for port modernization and connectivity projects.
Energy Projects
The energy segment of L&T is a dynamic combination of hydrocarbon operations, innovative CarbonLite solutions, and green, clean energy ventures. This diversified business unit undertakes projects that range from:
- Onshore and offshore oil & gas exploration and production facilities
- Refineries and fertilizer plants
- Coal-based thermal power stations
- LNG, natural gas (NG), and liquid fuel-based power plants
- Manufacturing of alkaline electrolysers, key for emerging hydrogen technologies
For FY24-25, the segment achieved a revenue of ₹40,689 crore, marking an impressive 37.6% increase over the previous fiscal year, with an operating profit margin of 8.4%. International projects accounted for 66% of this revenue. Order inflows reached ₹87,459 crore—an 18.7% year-over-year increase—while domestic orders in FY25 totaled ₹35,171 crore. L&T’s energy facilities are strategically placed in Chennai, Mumbai, Vadodara, Hazira, Kattupalli, as well as in the Kingdom of Saudi Arabia and Oman, ensuring a robust operational spread.
Hi-Tech Manufacturing
L&T’s hi-tech manufacturing division encapsulates both heavy and precision engineering. This segment is instrumental in delivering advanced engineering solutions across several critical industries:
- Heavy Engineering: Production of high-tech reactors, heat exchangers, and nuclear reactors.
- Precision Engineering: Manufacturing specialized products serving power generation, aerospace, and defence applications.
- Shipbuilding: Operating its own shipyard to construct warships, submarines, and related military equipment.
- Defence Systems: Crafting artillery systems, air defence installations, weapon delivery mechanisms, armoured platforms, and combat engineering systems.
- Aerospace: Developing boosters and vital hardware for the aerospace sector.
In FY25, revenues for this segment increased by 16.1%, from ₹8,765 crore in FY24 to ₹10,181 crore, with an operating profit margin of 17.3%. New orders reached ₹18,282 crore—a 28.0% rise—with 21% of these coming from international markets.
IT & Technology Services
Embracing digital innovation, L&T has carved a significant niche in the technology sphere through multiple initiatives, including:
- LTIMindtree: Offering comprehensive IT consulting and digital transformation solutions across various industries.
- L&T Technology Services (LTTS): Specializing in Engineering Research and Development (ER&D) services, with revenues exceeding $1.25 billion in FY24-25.
- L&T Semiconductor Technology: Pioneering in fabless semiconductor technology with a global workforce of over 350 professionals.
- L&T EduTech: Focusing on educational technology solutions tailored to complement the digital capabilities of its sister companies.
- L&T SuFin: Functioning as a dedicated B2B marketplace for industrial and construction goods.
- L&T Cloudfinity: Delivering data centre solutions, cloud services, AI implementations, and comprehensive managed services.
This multi-pronged approach in the technology domain ensures that L&T remains at the forefront of digital transformation and innovation, catering to both traditional IT needs and emerging tech landscapes.
Financial Services
L&T’s financial services unit diversifies its offerings from rural and farmer finance to urban and SME finance. Key elements include:
- Loan Portfolio: As of March 31, 2025, the loan book stands at ₹95,000 crore.
- Microfinance Strategy: Recently modified to focus on Loan Against Property (LAP) and gold loans, conforming to evolving policy frameworks.
- Tractor Financing: In FY25-26, the sector financed 95,000 new tractors, backed by OEM partnerships and supported by a dealer network of 2,400.
- Additional Financing: Active in two-wheeler finance, retail housing loans, and personal lending.
L&T also drives several development and other projects, such as:
- The Hyderabad Metro Rail project, which achieved an average daily ridership of 444,000 in FY24-25 across 69.2 km of track.
- Nabha Power Limited, operating a 2×700 MW thermal power plant under a 25-year agreement with the Government of Punjab.
- A strategic collaboration with Komatsu for the distribution and after-sales service of mining and construction equipment.
Financial Overview of Larsen & Toubro
Over the past five financial years, Larsen & Toubro has experienced strong revenue growth, even as the growth in Profit After Tax (PAT) has been comparatively modest. Notably, the company’s Return on Equity (ROE) witnessed a marked improvement during the post-COVID recovery period. Efficiency metrics have also seen significant enhancements, with both Debtor Days and Inventory Days reducing substantially over this period.
In FY25, the Return on Capital Employed (ROCE) was reported at 14%, underscoring the company’s effective utilization of its capital. At the close of FY25, L&T’s financials revealed a total debt of ₹132,409 crore, registering a notable increase from FY24, while liquidity remained healthy with cash and cash equivalents standing at ₹22,965 crore as of April 1, 2025.
The stock is currently trading at a Price to Book Value ratio of 5.18, and the Total Debt to Equity ratio is 1.33. Additionally, market performance indicators show a trailing twelve-month Price to Earnings (TTM PE) multiple of 34.37. On the valuation side, the Enterprise Value (EV) has reached ₹604,424 crore, with an EV/EBITDA ratio of 19.78.
Assets and Liabilities Overview – Larsen & Toubro (As of March 31, 2025)
Larsen & Toubro’s financial position remains strong, with significant retained earnings and a well-diversified asset base. As of March 31, 2025, the company’s retained earnings stood at ₹89,974 crore. The total book value of its plants and buildings was ₹1,659 crore, reflecting a decrease from the previous fiscal year. Additionally, L&T recorded goodwill of ₹8,348 crore, primarily attributed to its IT & Technology Services segment.
Current Assets – Investments
L&T maintained a diverse investment portfolio, with holdings that included:
- ₹11,787 crore in Government and trust securities
- ₹14,517 crore in Mutual Funds
- ₹4,179 crore in Infrastructure Investment Trusts (InvITs)
- ₹3,646 crore in Treasury bills and other investments
Cash and Cash Equivalents
The company’s liquid assets amounted to ₹12,187 crore, comprising:
- ₹8,595 crore held in bank balances
- ₹678 crore in cheques and drafts on hand
- ₹2,907 crore in fixed deposits with banks (maturing within three months)
- Additionally, L&T had ₹5,046 crore in fixed deposits and ₹4,726 crore in margin money deposits.
Non-Current Borrowings
The company maintained long-term borrowings totaling ₹57,162 crore, consisting of:
- ₹30,271 crore in non-convertible debentures (fixed rate)
- ₹23,741 crore in term loans from banks
- ₹3,150 crore in loans from financial institutions
Short-Term Borrowings
L&T’s short-term liabilities included:
- ₹11,947 crore in loans repayable on demand
- ₹12,745 crore in short-term loans and advances from banks
- ₹11,169 crore in commercial papers
Current Maturities of Long-Term Debt
As part of its financial obligations, L&T had long-term debt maturities of:
- ₹18,328 crore in non-convertible debentures (fixed rate)
- ₹17,522 crore in term loans from banks
- ₹344 crore in loans from financial institution
Order Inflows and Segment Contributions
For the fiscal year 2024-25, L&T recorded an order inflow of ₹356,631 crore. Remarkably, 58% of this new business came from international projects—a 17.8% increase over FY23-24 figures. Breaking down the order inflows by segment:
- Infrastructure Projects: Contributed 49% of the total.
- Energy Projects: Accounted for 25%.
- IT and Technology Services: Made up 15%.
By the end of FY25, the overall order book expanded to ₹579,137 crore. Within this portfolio, infrastructure projects comprised 62%, with international orders representing 46% of the total order book. These metrics speak to a well-diversified business model that leverages both domestic and international opportunities.
Competitive Landscape
L&T’s diversified operations mean that it faces competition from various industry players across its multiple business segments. Here’s a breakdown of key competitors in each area:
Infrastructure Peers
- Shapoorji Pallonji
- Punj Lloyd
- Afcons
- Ashoka Buildcon
- BL Kashyap
- Hindustan Construction Company
- IRB
- Ahluwalia Contracts
- IRCON
- RVNL
- NBCC (India)
- Engineers India
- KEC International
Energy Segment Competitors
- Siemens
- BHEL
- ABB
- Schneider Electric
- Honeywell Automation
IT and Technology Services Competitors
Financial Services Competitors
- Private and Public Sector Banks
- Bajaj Finance
- M&M Finance
- Manappuram Finance
- Muthoot Finance
- Poonawalla Fincorp
- Jio Financial Services
Conclusion
Larsen & Toubro exemplifies the evolution of a traditional engineering powerhouse into a dynamic, multidimensional conglomerate. Its expansive business portfolio—from landmark infrastructure projects and pioneering energy ventures to cutting-edge hi-tech manufacturing, innovative IT and technology services, and comprehensive financial solutions—demonstrates a tireless commitment to excellence and adaptability in a rapidly changing global market.
The company’s strategic focus on international markets and continuous investment in emerging technologies, notably in renewable energy, digital transformation, and semiconductor technology, have not only bolstered its market presence but also diversified its revenue streams. With impressive order books and robust financial performance, L&T has effectively turned challenges into opportunities, reinforcing its leadership with sustained revenue growth and operational efficiency.
Moreover, L&T’s balanced financial posture, supported by disciplined cost management and a diversified investor base, positions it to capitalize on future growth prospects. As governmental initiatives and industry trends align with its strategic vision, L&T remains an exemplary model of how traditional engineering expertise can be seamlessly integrated with modern technological innovation to set new benchmarks for quality, efficiency, and sustainability.
In essence, Larsen & Toubro’s journey is a testament to its relentless drive for innovation and excellence. The conglomerate’s robust financials, visionary leadership, and agile market strategies not only ensure resilience in turbulent times but also pave the way for continued global influence and transformative achievements in the years to come.
References
- Larsen & Toubro FY24-25 Annual Report
- Larsen & Toubro page on Money Control
- Larsen & Toubro page on Screener.in
- L&T Finance Holdings Limited Final Offer Documents filed with ROC
