India's largest infrastructure and engineering firm, Larsen & Toubro Ltd, which derives over a third of its revenue from West Asia, has said that most of its over 100 construction projects in the region are progressing as usual, with work halted at only a handful of sites.
“About 5% of the sites are suspended or disrupted because they are close to the army bases,” Subramanian Sarma, deputy managing director and president at L&T, said in a press briefing on Saturday, the company’s first major status update since the US-Israel-Iran war broke out on 28 February.
Most of the work suspension has been voluntary, he said, to ensure the safety of the company’s staff. At two sites, customers recommended temporarily halting work, he added.
The company has not yet evacuated any staff from the region, but it is also not sending new people there from India at the moment, he said. The engineering firm has about 8,000 staff, 2,000 family members, and 20,000 contract workers in the region.
Sarma’s comments come at a time when L&T shares have slipped by nearly a fifth since the US and Israel launched strikes against Iran three weeks ago, closing at ₹3,434.8 on BSE on Friday. The Sensex has lost just over 8% during this period.
Analysts at Motilal Oswal trimmed their price target for the stock to ₹4,400 from ₹4,600 earlier due to the crisis. “We have limited clarity on how things will unfold in the Middle East (West Asia) over the medium term, but in the near term, it can impact execution as well as margins for certain projects,” the analysts wrote in a 4 March report.
Construction behemoth
L&T is involved in large-scale engineering, procurement, and construction (EPC) work in West Asia, spanning petroleum drilling, refining, transportation infrastructure, renewable energy plants, water treatment facilities, and energy transmission infrastructure.
A big concern for the firm at the moment is logistics and supply chain management, Sarma said. Significant equipment and materials come to the project sites in the region from China and Europe. Movement of all this seaborne cargo has come to a halt, he said. However, there were three months’ worth of material at the sites, providing a sufficient cushion, he added.
However, if the supply chain doesn’t resume soon, this could impact the company’s revenues, he warned.
Material cost inflation will also be a concern, but Sarma said many contracts already include cost escalation clauses. Even where such clauses are absent, he said the company was confident customers would cooperate in sharing the higher cost given the extraordinary situation.
Sarma said he does not expect the awarding of new projects in the region to be affected by the war. Bidding for outstanding project tenders was going on as usual, he said.
Company with a plan
The company always had a contingency plan for a situation like this in the oil-rich region, Sarma said. For instance, it always focused on projects deemed critical for local governments, ensuring they receive priority even if a crisis broke out.
The management of liquidity, margins, and the pacing of projects was also done with consideration of the eventuality that such a crisis could break out. Most of the projects in the region have been insured, with some also having war insurance, he said.
The company was also in touch with local governments and the ambassadors of Indiato all the countries where it is present in West Asia to be prepared for such eventualities, Sarma said.
A situation management committee, consisting of Sarma and senior executives from multiple group functions, met every evening to take stock of the situation, he said.
This is not the first instance of unrest in the region in recent years. Just past June, Israel and Iran had exchanged a volley of missiles after the US and Israel struck nuclear enrichment facilities in Iran. Meanwhile, conflict between Iran and its proxies and Saudi Arabia has also routinely flared up, with energy sites often being targeted.
While L&T has significantly increased exposure to West Asia over the past five years—with the share of international business in its core segments rising from 28% in 2020-21 to 50% in the first nine months of 2025-26—the company is now focusing on diversifying into other regions as well. The key considerations are Europe and Africa, Sarma said.
L&T recently won a significant order to develop high-voltage direct current converter stations for an offshore wind project off the coast of the Netherlands, its largest-ever order valued at about ₹30,000 crore.
