L&T targets ₹15 lakh crore order book by FY31; Middle East accounts for $30 billion overseas orders

Larsen & Toubro (L&T) is targeting a doubling of its order book to ₹15 lakh crore by FY31, provided fresh order inflows grow at an annual rate of 15%, R Shankar Raman, the company’s president and whole-time director (finance), said on Wednesday. The engineering, procurement and construction (EPC) major currently has an order book of ₹8.5 lakh crore, reflecting its expansion ambitions across domestic and international markets.

The company expects its geographical revenue mix to change significantly over the next five years, with India’s contribution declining to 40% from the current 50%. The Middle East is projected to account for another 40%, while Europe, Central Asia, Africa or the Far East could contribute the remaining 20%, Raman told reporters.

Middle East accounts for two-thirds of overseas order book

L&T’s overseas order book stands at $45 billion, of which $30 billion comes from the Middle East. Saudi Arabia is its largest market in the region, followed by the UAE, Qatar and Kuwait.

Raman said the company’s nearly 150 operational sites in the Middle East continued to function normally despite the West Asia conflict, although shipments, logistics and insurance costs remained challenging. He also said the company had not experienced an impact from Houthi attacks on Saudi Arabia, arguing that under-construction projects remained safe.

The growing overseas contribution has helped L&T reduce its net working capital ratio to 1.7% in the September 2026 quarter, from more than 30% when domestic revenues accounted for a larger share. Raman said the company increasingly prioritised balance-sheet strength over profits alone, citing better returns on funds employed and greater execution certainty in Middle Eastern markets.

Execution challenges weigh on domestic projects

Raman said projects in the Middle East generally offered greater clarity on land acquisition, financing and contractual obligations. In India, evolving project requirements can extend execution timelines by 20-25%, he said.

L&T is handling 69 contracts under the Jal Jeevan Mission, where stop-work orders and payment-related issues have disrupted execution. Timelines could double to six years, Raman said. The company has decided to avoid last-mile water supply projects but remains interested in desalination plants.

Energy, semiconductors and automation drive investments

L&T is tracking opportunities including a ₹50,000-crore European wind-energy project involving heavy platforms for converting AC power to DC, a subsea transmission link between Morocco and the UK via Germany, and an airport and data centre in Uzbekistan. India’s wind and nuclear energy sectors also offer opportunities.

The company is investing in semiconductors, where it is currently consuming around ₹100 crore in cash per quarter, and has established a ₹300-crore automation centre at Khalapur in Maharashtra’s Raigad district. Automation is expected to help address a workforce shortfall of approximately 60,000 employees.

Raman said L&T continues to recruit engineers and postgraduate talent but has reduced hiring at lower levels, citing a mismatch between university training and industry requirements. He added that currency depreciation benefits the company as a net exporter, while operating conditions have contributed to margin pressure.