By BullScreen Editorial Team 
Shares of Larsen & Toubro (L&T) have fallen nearly 10% in just two trading sessions, as rising geopolitical tensions in the Middle East triggered fresh worries among investors. The decline came after the recent military escalation involving the United States, Israel, and Iran, which has raised concerns about the impact on companies with strong exposure to the Gulf region.
The engineering and infrastructure giant has a massive order book of about ₹7.3 lakh crore, including contributions from its IT subsidiaries. A large portion of this order pipeline is linked to projects in West Asia, making the company particularly sensitive to developments in the region.
According to company data, around 37% of L&T’s total order book currently comes from the Middle East. The region has been a key growth driver for the company, especially with large infrastructure, refinery, and pipeline projects being developed in countries such as Saudi Arabia and the UAE.
In fact, about 33% of the company’s new orders during the first nine months of FY2026 were sourced from West Asia. Over the past few years, L&T has deliberately increased its presence in the region to benefit from massive expansion plans being undertaken by Gulf nations.
However, the ongoing conflict has created several risks. One major concern is the possibility of disruptions in supply chains. L&T’s integrated project execution model relies heavily on the movement of materials and equipment from India to project sites in the Middle East. Any restrictions on logistics or shipping routes could delay project execution.
Another issue is rising cost pressure. Analysts at Macquarie Group pointed out that nearly 55% of L&T’s Gulf order book consists of fixed-price contracts. If input costs rise due to higher crude oil prices, freight charges, or insurance costs during the conflict, the company may face pressure on its profit margins.
There are also concerns about potential damage to infrastructure and project sites in the Gulf if the conflict escalates further. If such disruptions occur, it remains unclear whether the financial burden would fall on project clients or on L&T itself.
Despite these short-term risks, some brokerages see opportunity in the recent fall. Analysts at CLSA described the decline as a potential buying opportunity for long-term investors. Meanwhile, Motilal Oswal Financial Services has maintained its “buy” rating on the stock, although it slightly reduced its price target to ₹4,400 from ₹4,600 earlier.
For now, market participants are closely watching the geopolitical situation in the Middle East, as any further escalation could continue to influence investor sentiment toward companies like L&T that have significant business exposure in the region.