L&T aims to double revenue to ₹5.8 trillion by FY31 under its new Lakshya 31 plan, shifting capital toward green hydrogen and semiconductor manufacturing.
Larsen and Toubro Ltd (L&T) has unveiled its five-year strategic roadmap, Lakshya 31, targeting a doubling of revenue to ₹5.8 trillion by fiscal year 2031. This ambitious plan follows the conclusion of the Lakshya 26 cycle, where the engineering giant successfully surpassed its revenue and order inflow targets but fell short of its return on equity (RoE) objectives. The new framework shifts the company’s capital allocation toward capital-intensive sectors including green hydrogen, semiconductor manufacturing, and data centers, marking a potential departure from its long-standing asset-light business model.
The company has set a compounded annual growth rate (CAGR) target of 12-15% for revenue between FY26 and FY31. To support this, L&T aims for a 10-12% CAGR in order inflows, which would push annual bookings to ₹7.75 trillion by the end of the period. This follows a robust performance in FY26, where the company secured ₹4.4 trillion in new orders, expanding its total order book to ₹7.4 trillion. Despite these headline figures, market analysts have raised concerns regarding the composition of this growth. Specifically, the 10-12% order inflow target suggests single-digit growth expectations for the core infrastructure segment, which remains the backbone of the company’s operations.
A central point of contention in the Lakshya 31 plan is the planned capital expenditure of ₹42,400 crore across new business verticals. The allocation includes ₹15,000 crore for green hydrogen and ammonia, ₹10,000 crore for data centers, ₹5,000 crore for industrial electronics, ₹3,000 crore for semiconductor manufacturing, ₹4,400 crore for the real estate business, and ₹5,000 crore for upgrading existing hydrocarbon facilities. Analysts at PL Capital have noted that the decision to own and operate these assets conflicts with L&T’s previous strategy of divesting capital-heavy holdings, such as its recent exits from Nabha Power and the Hyderabad Metro project.
The shift toward asset-heavy operations has triggered skepticism regarding the company’s ability to improve its return ratios. While L&T has projected an RoE of 16-17% for the Lakshya 31 period—a slight improvement over the 16.6% achieved in FY26—some observers argue this target is underwhelming. The concern is that the lower margins inherent in green hydrogen and ammonia production could dilute overall returns on investment. By moving away from an asset-light model, the company faces the risk of margin compression, which may offset the gains from its expansion into high-tech manufacturing and energy infrastructure.
L&T’s ability to meet its previous Lakshya 26 goals provides a baseline for evaluating its current strategy. In the prior cycle, the company achieved revenue of ₹2.86 trillion, exceeding its ₹2.7 trillion target, and significantly outperformed its order inflow goal of ₹3.4 trillion. However, the failure to reach the 18% RoE target in the previous cycle highlights the difficulty of balancing aggressive growth with capital efficiency. Following the announcement of the new plan, shares of L&T declined 1.18% to close at ₹4,008.35 on the BSE, even as the broader Sensex index posted a 1.22% gain. This divergence suggests that investors are weighing the long-term revenue potential against the immediate risks of increased capital expenditure and potential margin dilution. The company’s future performance will depend on its ability to execute these complex projects while maintaining the disciplined capital allocation framework that has historically supported its valuation. For those tracking the broader industrial sector, the transition from pure-play engineering to an owner-operator model in energy and technology will be the primary indicator of whether L&T can sustain its growth trajectory without sacrificing shareholder returns.
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