Business is as usual for Larsen & Toubro even as the West Asia conflict has weighed heavily on the stock, which has plunged 20 per cent since February 27. India’s premier engineering and construction (E&C) player accrues about a third of its consolidated revenue from the region. But majority of energy and infrastructure projects across its sites there remain unfazed.
While logistics could become an issue and business may feel the heat if the war prolongs beyond three-four months, more opportunities could also emerge once the war ends.
In a select media briefing over the weekend, Subramanian Sarma, deputy managing director and president of L&T, said, “Despite the unfortunate developments in the region, roughly 95 per cent of L&T’s 100-plus sites are operating as ‘business as usual.'”
“While 5 per cent of projects — largely those near conflict zones — have been voluntarily suspended (either as a precaution or at the customer’s request), the core of the portfolio remains untouched,” he elaborated. None of the sites have faced any attack, and invoicing and collections are on schedule, he said, adding that project bidding and awarding have not seen a slowdown.
L&T’s footprint in West Asia spans Saudi Arabia, the UAE, Qatar, Kuwait, and Oman. Of the ₹3.46 trillion order inflow in April-December 2025 (9MFY26), a third was from the Middle East. As of December 2025, L&T’s order backlog was ₹7.33 trillion, 37 per cent of which came from the region.
West Asia is more than just a market. It is a “second home” for L&T, built over three decades of calibrated expansion. Its presence is strengthened by a workforce of approximately 10,000 staff (including 2,000 family members), and 20,000 contractual workers. No evacuations have been necessary so far, but the company has paused sending new workers for now, said Sarma.
The logistics and supply chain situation, though, is complex. Although local road transportation, including within Gulf countries, is working fine, international shipments from China and Europe have seen disruptions.
The company, however, doesn’t see any major issues in terms of supplies in the near-term, given its practice of maintaining a three-four month inventory buffer. While this provides a critical shield, allowing L&T to scout alternative maritime routes, if the logistics situation does not resolve in coming months, it may have an impact on the operations and revenues.
On the rise in input and logistic costs, Sarma said, like during the Covid pandemic, he hopes that these will be passed on to customers. L&T has a mix of fixed, as well as, price variation projects.
The group’s ability to remain calm amid the storms also stems from a specialised internal group that activates during unusual global situations like the current one. This high-level body — comprising the CEO, CFO, and heads of Risk and IT — monitors developments daily, maintaining constant dialogue with Indian embassies, local governments, and industry partners.
As geopolitical tensions flare and energy markets undergo a seismic shift, the group is in the midst of deploying a strategy to pivot toward a decarbonised future. Expansion into Southeast Asia, Africa, and even the European offshore wind market should help ensure that no single regional conflict can derail its growth trajectory.
Likewise, is its diversification into new energy segments, which will help sustain growth rates in the coming years. The company believes that the current crisis, which has highlighted the vulnerability of traditional hydrocarbon supply chains, will help accelerate the global push for energy diversification — renewables, coal gasification, nuclear and thermal.
Sarma said that once the West Asia war is over, there should be more business opportunities in the form of faster ordering of new projects, reconstruction of existing projects, and new evacuation routes for oil and gas.
