Larsen & Toubro Aims for ₹15 Lakh Crore Order Book by FY31 on Global Expansion

Engineering, procurement and construction major Larsen & Toubro (L&T) has announced plans to double its order book to ₹15 lakh crore by FY31, up from its current standing of ₹8.5 lakh crore. The target is anchored on an anticipated new ordering growth pace of 15 percent per year, according to President and Whole-Time Director for Finance, R Shankar Raman.

As the company expands its global footprint, the composition of its revenue is shifting. Currently, domestic business and global operations are evenly split at 50 percent each. Over the next five years, L&T expects the domestic revenue share to decline to 40 percent. Meanwhile, the Middle East is projected to account for another 40 percent, with a third geographic region—such as Europe, Central Asia, Africa, or the Far East—making up the remaining 20 percent. Five years ago, India contributed three-fourths of the company's revenues.

L&T's current overseas order book stands at USD 45 billion, with USD 30 billion originating from the Middle East. Saudi Arabia leads the regional market, followed by the UAE, Qatar, and Kuwait. Raman noted that ongoing regional conflicts have not impacted the company's roughly 150 operational sites in the Middle East, though the firm continues to manage higher logistics, insurance, and shipping costs.

The company favors executing projects in the Middle East due to higher predictability in documentation, land acquisition, and financing, alongside sacrosanct contracts. By comparison, L&T encounters execution challenges in India, where project timelines often extend by 20 to 25 percent due to evolving nuances discovered during execution. The increased proportion of Middle Eastern projects has helped L&T reduce its net working capital ratio to 1.7 percent in the September 2026 quarter, down from over 30 percent when its revenue base was more domestic-heavy.

Domestically, L&T faces specific headwinds, including execution delays in Jal Jeevan Mission contracts, where stop-work orders and payment freezes have stalled progress. Consequently, the company has decided to step away from last-mile water delivery projects while remaining interested in essential infrastructure like desalination plants. Additionally, L&T is investing in its semiconductor business, burning about ₹100 crore per quarter, which leadership views as essential for future revenue potential.

To address a current worker shortfall of about 60,000, L&T is pursuing automation, including deploying robots for painting and welding. The company has established a ₹300-crore center in Khalapur, Raigad district, dedicated to automation needs. While hiring for engineers and post-graduates remains steady, the firm has reduced lower-level hiring due to a skills mismatch between university outputs and industry requirements.

"Larsen & Toubro's strategic shift toward international markets, particularly the Middle East, demonstrates how geographic diversification can stabilize working capital and improve project execution predictability. For businesses scaling heavy operations, predictable contracting environments and stringent balance sheet management are vital for long-term resilience. While domestic challenges and skill gaps remain hurdles, L&T's investments in automation and high-potential sectors like semiconductors highlight a pragmatic approach to future-proofing traditional engineering enterprises." — Dr. Shishir Gupta, Founder & CEO, StartupLanes