Larsen & Toubro Limited

Strong momentum: record inflows + improving working capital (good/surprising) - Q3 FY26 order inflows: INR 1,356 bn, +17% YoY; highest ever quarterly inflows. - Projects & Manufacturing (P&M) inflows: INR 1,164 bn, +18% YoY; domestic INR 620 bn (+30%), international INR 544 bn (+7%). - Working capital improved sharply: Net working capital (NWC) / sales = 8.2% as of Dec-25 vs 12.7% in Dec-24 (≈ 450 bps improvement YoY). - Cash flow improvement (ex- Financial Services): operating cash flow INR 79 bn in Q3 vs INR 21 bn in Q3 prior year.

Financial performance: margins up but reported profit impacted by one-off (mixed/bad) - Group revenue (Q3): INR 714 bn, +10% YoY; international revenues 54%. - EBITDA margin (group ex other income): 10.4% vs 9.7% prior year (+70 bps), driven by operational efficiencies. - P&M EBITDA margin (Q3): 8.1% vs 7.6% prior year (+50 bps). - Recurring PAT (Q3): INR 44 bn, +31% YoY. - Reported PAT (Q3): INR 32 bn, -4% YoY, due to a one-time impact of INR 11.9 bn from new Labour Codes legislation (also added ~110 bps to ROE via the provision effect). - ROE (as of Dec-25): 16.5%, +40 bps YoY (but includes the labour-code provision impact).

Order book & pipeline: growth in near-term prospects; composition shifts toward private sector (good) - Prospects pipeline (near term): INR 5.92 tn, up 7% YoY from INR 5.51 tn. - Pipeline drivers: CarbonLite Solutions and Precision Engineering & Systems. - Order book: INR 7.33 tn as of Dec-25 (+30% vs Dec-24). - Mix: ~92% from Infrastructure + Energy. - Geography: 51% domestic / 49% international. - Domestic mix improvement: private sector share rose to 36% (from 21% in Mar-25), supported by thermal power, storage, real estate & ferrous/non-ferrous opportunities. - International concentration: ~75% of international book from the Middle East.