L&T’s Lakshya 31 to ride on core growth and technology-led new businesses

Engineering and technology major Larsen & Toubro (L&T) has unveiled its next five-year strategic roadmap—Lakshya 31—aimed at making the organisation future-ready through accelerated investments in AI, digital technologies, data centres, green energy, industrial electronics, and semiconductor technologies, while consolidating its leadership in infrastructure, energy and high-tech manufacturing.

“As this is the terminal year of our Lakshya 26 plan, I am happy to say that we have achieved most of the targets we set for ourselves, whether in terms of order book, revenue or exits from non-core businesses,” said S N Subrahmanyan, CEO & MD of Larsen & Toubro while reviewing FY26 results.

When L&T launched Lakshya 26 in FY21, it had targeted doubling order inflows from ₹1.7 lakh crore to ₹3.4 lakh crore at a CAGR of 14%, revenues from ₹1.4 lakh crore to ₹2.7 lakh crore at a CAGR of 15%, and improving return on investment (RoI) from 10% to 18% by FY26. The company exceeded most of those targets. Order inflows touched ₹4.4 lakh crore at a CAGR of 20%, while revenues rose to ₹2.9 lakh crore at a CAGR of 16% by FY26. However, the RoI target fell marginally short at 16.6%.

Key growth drivers during the Lakshya 26 period included the merger of IT firms LTI and Mindtree, the transformation of L&T Finance into a retail-focused lender, exits from non-core businesses such as hydel projects, Hyderabad Metro and Nabha Power, and entry into emerging sectors such as green energy, data centres and semiconductor design. “Our endeavour has been, as always, to be agile and proactive in responding to an ever-changing environment and drive technology-led profitable growth for long-term stakeholder value creation,” said Subrahmanyan.

Lakshya 31 targets

Under Lakshya 31, L&T aims to grow order inflows at a CAGR of 10-12%, from the current ₹4.4 lakh crore to around ₹7.75 lakh crore by FY31. Revenues are projected to double to nearly ₹5.8 lakh crore at a CAGR of 12-15%.

The company plans capital expenditure of ₹43,000-45,000 crore over the next five years, while maintaining RoI in the range of 16-17%.

The investments will focus on strengthening core businesses through manufacturing facilities, yards, process automation, project-led capex and commercial real estate. At the same time, L&T plans to build future growth engines in data centres, green hydrogen, semiconductor design and electronic products manufacturing.

L&T’s traditional engineering and EPC businesses continue to generate large revenues, though margins remain modest. EBITDA margins in Infrastructure & Utilities, Energy-Conventional and Energy-Green businesses have largely remained in the 6-8% range over the past five years. In FY26, Infrastructure & Utilities reported revenues of ₹99,404 crore, Energy-Conventional ₹54,351 crore and Energy-Green ₹35,020 crore. The Manufacturing & Products segment, which posted revenues of ₹18,313 crore in FY26, maintained healthier EBITDA margins of 17-18%.

The biggest profit contributor, however, was the Technology, Platforms & Services segment, which reported revenues of ₹53,671 crore and EBITDA margins exceeding 20%. Financial services generated revenues of ₹17,283 crore and EBITDA margins of over 24% during the past three years. Though relatively smaller in size, the realty business continued to remain highly profitable, with EBITDA margins nearing 50% on revenues of ₹2,716 crore in FY26.

Betting on India’s growth story

L&T is banking on India’s long-term growth trajectory, driven by GDP expansion of 6-7%, sustained investments in infrastructure and energy, defence spending and the energy transition. The company sees opportunities across coal, nuclear energy, battery energy storage systems (BESS), grid infrastructure, renewables, and defence manufacturing.

In EPC and manufacturing, the focus will remain on sustaining growth momentum with better profitability and selective geographical diversification. In Heavy Engineering, L&T plans to deepen its presence across the nuclear value chain and strengthen leadership in oil and gas equipment manufacturing. In Precision Engineering & Systems, the company will focus on indigenisation, strategic partnerships, R&D and intellectual property creation. Industrial Electronics will focus on robotics and automation, communication platforms and electronic system design and manufacturing (ESDM). In green hydrogen and ammonia projects, the strategy will be to pursue selective domestic and export opportunities backed by long-term take-or-pay agreements and strategic partner investments.

L&T also sees technology-led businesses emerging as key growth drivers under Lakshya 31. LTIMindtree revenues are expected to double during the period, while L&T Technology Services (LTTS) is targeting 13-15% CAGR growth, driven by AI-embedded engineering services. In data centres, the company plans to focus on hyperscale alliances, AI-ready infrastructure and sovereign/private cloud offerings.

Semiconductor design initiatives will target mobility, energy, and industrial applications as L&T positions itself for the next phase of technology-led industrial growth.