Larsen and Toubro’s plan to double its order book to ₹15 lakh crore by FY31 is more than a growth target. It signals a structural shift in how one of India’s largest engineering and construction companies is assessing project risk, capital deployment and execution certainty. The company expects overseas business to account for a larger share of revenue as it expands in the Middle East and evaluates opportunities across Europe, Central Asia, Africa and the Far East.
L&T’s president and whole-time director for finance, R Shankar Raman, said the company could reach an order book of ₹15 lakh crore by 2031 from the present ₹8.5 lakh crore if new ordering grows at 15 per cent annually. The company’s current domestic and overseas revenues are evenly split, but the stated objective is to reduce India’s contribution to 40 per cent over the next five years. The Middle East could account for another 40 per cent, while a third geography could contribute the remaining 20 per cent.
That proposed mix marks a significant change from the company’s position five years ago, when India contributed three-fourths of revenues and overseas markets accounted for one-fourth. The shift reflects the growing importance of project environments where land, financing, contractual obligations and implementation responsibilities are defined before construction begins.
The distinction between domestic and overseas execution is central to L&T’s strategy. Raman said Middle Eastern projects offer greater clarity on land acquisition and finance, while contracts are more consistently enforced. In India, he said, project conditions can become clearer only after work has begun, resulting in execution timelines extending by 20-25 per cent.
This is not only a corporate operating issue. It points to the administrative conditions that determine whether large infrastructure projects are delivered on time and whether contractors can protect their working capital. A project may be technically viable and financially sanctioned, but uncertainty over land, payments, approvals or contract interpretation can alter its cost and duration substantially.
L&T’s overseas order book currently stands at $45 billion, with $30 billion coming from the Middle East. Saudi Arabia is the company’s largest Gulf market, followed by the UAE, Qatar and Kuwait. The company has nearly 150 operational sites in the region, according to Raman, and said these sites have continued to operate during the West Asia conflict.
The regional exposure has not eliminated risk. L&T is facing higher logistics and insurance costs and challenges in sending shipments to the Middle East. Raman said the attacks by the Houthis had not affected the company’s under-construction projects, which he said were safe because the group was targeting existing assets. The company’s account therefore combines operational continuity with higher costs and geopolitical exposure.
The financial effect of the geographic shift is visible in the company’s working capital position. L&T’s net working capital ratio declined to 1.7 per cent in the September 2026 quarter from more than 30 per cent when India accounted for a larger share of revenues. Raman also said returns on funds employed were better in the Middle East and that the company had prioritised balance-sheet strength over profit-and-loss growth alone during the past five years.
These figures do not establish that overseas work is uniformly more profitable or safer. They do show why contract structure and project administration have become strategic considerations for an infrastructure company. The stated preference is not simply for larger projects, but for projects where the conditions for execution are documented and the payment framework is more dependable.
L&T is also tracking opportunities outside its current concentration in the Gulf. Raman referred to a proposed subsea power transmission line linking Morocco and the United Kingdom through Germany, a four-year, ₹50,000-crore opportunity in European wind energy involving a heavy platform to convert alternating current to direct current, and airport and data-centre projects in Uzbekistan.
The projects under consideration reflect the changing nature of the construction and engineering market. Large contractors are increasingly participating in energy transition infrastructure, data infrastructure and complex transmission systems alongside conventional roads, buildings and industrial facilities. For L&T, this creates a broader pipeline, but it also requires specialist skills, larger engineering capabilities and the capacity to manage projects across different regulatory and currency environments.
Currency movements are part of that calculation. Raman said L&T is a net exporter and benefits when the domestic currency depreciates. That advantage, however, depends on the currency composition of costs and revenues, the location of procurement and the extent to which overseas contracts can absorb higher logistics or insurance expenses. The company’s comments indicate that international exposure is being used as a balance-sheet and operating strategy, not only as a way to increase revenue.
The domestic market remains important, even as its share of L&T’s revenues is expected to fall. Raman identified wind and nuclear energy as areas with potential in India. Offshore wind, however, faces a geographic and infrastructure challenge: the western coast has stronger wind resources, while the eastern coast offers better ground conditions for erecting infrastructure. He also said that the Shanti Act had addressed liability concerns in the nuclear sector, but that the industry was not yet fully convinced.
Water infrastructure presents a different implementation problem. L&T is handling 69 contracts under the Jal Jeevan Mission, but Raman said some projects could take six years rather than the expected three because of stop-work orders, perceived governance problems, payment freezes and subsequent suspension of work by the company. The statement illustrates how public infrastructure delivery can be disrupted when administrative decisions and payment systems do not move in step with construction schedules.
The company has decided not to pursue projects focused on taking water to the last mile, while remaining interested in assets such as desalination plants. Raman described the water sector as important and indicated that desalination would become increasingly essential. The distinction suggests that L&T is screening projects not only by sector but also by the degree of execution control and payment certainty involved.
The same approach is visible in its technology investments. L&T is spending about ₹100 crore a quarter on its semiconductor business, which Raman said was necessary because of its revenue potential. At the same time, the company is automating repetitive tasks in its core operations, including painting and welding. It has developed a ₹300-crore centre in Khalapur in Raigad district to support its automation requirements.
The automation push is tied to a labour shortage of about 60,000 workers. L&T continues to hire engineers and postgraduates at the earlier pace but has reduced recruitment at lower levels. Raman also pointed to a mismatch between university-level skills and industry requirements. This makes the labour issue more complex than a simple shortage of workers: the company needs people who can work with automated production systems while continuing to execute labour-intensive construction activity.
For India’s construction sector, this is an important transition. Large projects require more than capital and equipment. They depend on supervisors, skilled tradespeople, engineers, project managers and workers who can operate within increasingly digital and automated systems. L&T’s investment in automation indicates that firms are beginning to treat labour availability and productivity as infrastructure constraints in their own right.
The company’s proposed revenue mix also raises questions about the relationship between India’s infrastructure ambitions and the ability of domestic institutions to support large contractors. A lower share of India in L&T’s revenues does not mean that Indian demand is weakening. Rather, it suggests that execution conditions can influence where a company chooses to deploy its balance sheet and management capacity.
The company has acknowledged margin pressure, attributing part of the contraction to the operating environment while maintaining that its margins are better than those of global peers. That claim is attributed to Raman and is not independently established in the supplied material. It nevertheless reinforces the broader message: the order-book target will depend not only on winning projects but on converting them into predictable execution, cash flow and returns.
L&T’s strategy therefore brings together four developments. The first is the internationalisation of an Indian engineering major, with the Middle East already accounting for most of its overseas order book. The second is the growing value of contract and governance certainty in determining project selection. The third is the expansion of infrastructure opportunities into energy transition, data centres and advanced transmission systems. The fourth is the attempt to use automation to address labour shortages and improve repeatable construction processes.
The evidence supplied does not establish whether L&T will achieve the ₹15 lakh crore target by FY31. It does establish the conditions the company believes are necessary: annual ordering growth of 15 per cent, continued overseas expansion, stronger balance-sheet management, new sectoral opportunities and greater automation. It also identifies unresolved risks, including geopolitical disruption, logistics and insurance costs, domestic execution delays, water-project governance issues and the shortage of appropriately skilled workers.
The larger urban and infrastructure question is whether India can create project environments that offer the same clarity on land, finance, contracts and payments that Indian companies increasingly value abroad. L&T’s expansion plan shows that global opportunities are widening. Its comments on domestic execution show that the competitiveness of India’s infrastructure sector will depend not only on the volume of public investment, but also on the institutions responsible for turning sanctioned projects into functioning assets.
