L&T Integrated Annual Report 2025-26: A Review

Official report: Get the L&T Integrated Annual Report 2025-26 from the company's website. This page is The Footnotes' independent review of it.

Verdict: L&T counts almost everything it builds, down to tonnes of cement, but leaves its two worst numbers out of the Chairman's letter. The ₹6,843 crore exceptional charge is in the MD&A. The 30 people who died on its sites are on page 369. Score: 27 of 35.

The PDF is 754 single pages, numbered as printed. After the Chairman's message comes the contents (p. 14), a 146-page MD&A (pp. 26-171), the Integrated Report (pp. 172-346), the BRSR (pp. 347-402), then the statutory reports and accounts. Screenshots are small excerpts reproduced for review and remain the copyright of Larsen & Toubro Limited; the full report is on the company's investor pages.

What the Chairman's letter leaves out

The Chairman and Managing Director's message (from p. 3) runs to about 2,500 words. It is candid about the world ("we are trying our best to get mentally used to events beyond our comprehension") and clear on the operating story: a record order book of ₹7.40 lakh crore, international orders above domestic for a third year, and Group recurring PAT of ₹17,238 crore, up 18%. It introduces Lakshya 2031, the next five-year plan.

Two numbers are missing from it.

The first is the exceptional charge. Standalone statutory profit fell 42% after a ₹6,843 crore exceptional item, and return on net worth roughly halved. The letter leads with "recurring" profit and never says so.

The second is the deaths. On safety, the letter (p. 5) says the company has "clocked 1,369 million accident-free working hours" and describes a move from "Mission Zero Harm" (defined as "no loss of life or serious injuries") to a new philosophy called "Vision Know Harm". The value creation model (p. 177) repeats the accident-free hours. Neither gives the fatality count.

Thirty deaths on page 369

The BRSR's safety table (p. 369) does:

Source: Larsen & Toubro Limited, Integrated Annual Report 2025-26, BRSR, p. 369. Covers employees and workers at project sites and manufacturing facilities.

Thirty people died. The trend is improving: 34 the year before, and fewer injuries. L&T runs 630 project sites with 3,78,039 workers, so some of this is the scale of Indian construction. But nowhere in the 175-page integrated report, including a human capital chapter with pages on safety culture (pp. 270-275), is the number stated.

Compare Tata Steel, whose CEO and CFO say in their own words that they "deeply regret the occurrence of nine fatalities". A company that reports tonnes of sand as a natural capital input can report the number of people who did not come home.

A results table that shows the hit

To its credit, the MD&A doesn't hide the exceptional charge. The standalone results table (p. 47) is the model for how to present a bad year:

• Recurring PAT ₹13,130 crore, up 26%.
• Exceptional item ₹(6,843) crore. The footnote names the two parts: the one-time effect of the new Labour Codes on gratuity, and the impairment of the investment in the Hyderabad Metro company, which L&T agreed to sell to a Telangana government entity on 29 April 2026 (p. 8).
• Overall PAT ₹6,287 crore, down 42%. RONW 8.6% against 15.9%. EPS ₹45.71 against ₹79.06.

The same page has a better story underneath. Borrowings fell from ₹21,935 crore to ₹11,773 crore, gross debt-to-equity from 0.31 to 0.16, and the company ended the year net debt-free. The ten-year table carries profit both "excluding" and "including" exceptional items for every year. Nobody reading the MD&A can be confused about what happened. The problem is only that the front of the report reads differently.

The most quantified value creation model we have reviewed

The value creation model is two facing pages, and every input and output has a number.

The inputs (p. 176) include something almost no one else does: natural capital in physical units. 3.2 million tonnes of cement, 5.1 million tonnes of sand, 1.8 million tonnes of ferrous material, 12.7 million kilolitres of water, 10.2 million GJ of energy. That is what the <IR> Framework intends by natural capital, and most reports put a rupee figure there instead.

The outputs (p. 177) count what was built: 67.1 million square feet of buildings, 122 kilometres of bridges and tunnels, 6,900 circuit-kilometres of transmission line, 8,006 MWp of solar capacity, 1,173 million litres a day of water treatment. And the financial output uses statutory return on net worth, 8.59%, not a recurring figure. The model is more honest than the letter.

The capital chapters that follow open with the material topics and SDGs that apply and run to real depth; natural capital alone is about thirty pages.

Materiality done properly

L&T did its first double materiality assessment in FY 2025-26, through an independent third party, guided by ESRS and GRI 2021. Impact is scored on scale, scope and irremediability; financial materiality on effect on the business. A full reassessment is committed every three years (p. 188).

The topics are then tabulated with their impacts, risks, opportunities and links to strategy. This is the second-best materiality disclosure we have seen after HDFC Bank's, and it is ESRS-aligned, which suggests L&T is preparing for European clients and regulators.

Scope 3, seven times larger

The emissions table (p. 216) is complete. Scope 1 is 6,17,113 tCO2e, Scope 2 is 2,89,920 tCO2e, and Scope 3 is reported across nine categories with prior-year figures. Purchased goods and services is 6.38 million tCO2e on its own, so the value chain is roughly seven times the company's own emissions. Diesel at project sites drives over 95% of Scope 1 and 2, and the report describes a task force to cut it.

The targets are carbon neutrality by 2040 and water neutrality by 2035, both for operations. There is no Scope 3 target. BDO India gives reasonable assurance on BRSR Core.

One more number from the MD&A (p. 43) is worth knowing: international orders rose from 46% to 52% of the consolidated order book. L&T is now majority-international by order book.

Page 172 of 754

The page design is good: five section tabs on every page and a consistent grid. The problem is order and volume. A reader opens the PDF, reads the Chairman's message, reaches the contents on page 14, and then meets 146 pages of business-by-business MD&A before the value creation model on page 176. The part of the report that explains how L&T creates value begins on page 172.

The bookmarks are complete, and the PDF is single pages, which helps. But there is no link to an online edition, and the stakeholder feedback form at page 751 is meant to be printed and posted.

The approach page (p. 173) credits "the IIRC's <IR> Framework", as Infosys does, though the Framework has sat with the IFRS Foundation since 2022. There is no statement of who approved the integrated report.

What other companies can copy

• Natural capital inputs in physical units (p. 176). Tonnes of cement and sand, not rupees.
• Outputs that count what was built (p. 177), with statutory return on net worth rather than a recurring figure.
• A results table with recurring, exceptional and overall profit on adjacent lines (p. 47), carried through the ten-year table.
• A dated, third-party double materiality assessment with impacts, risks and opportunities tabulated (p. 188).
• Scope 3 in every material category, with prior year (p. 216).

What not to copy: a chairman's letter that leaves out the exceptional charge and the fatality count, and an integrated report that starts on page 172.

The score

How it compares

Every review on The Footnotes uses the same seven-point card, so scores can be compared. Scores are editorial opinion of the published document.