The shares of Larsen & Toubro Ltd. will be in focus on Sunday ahead of the Union Budget Presentation. The company's performance is being closely watched as it is the barometer for India's infrastructure and industrial sectors, given its significant presence across construction, energy, and technology projects. In addition, the company's capex plans and order book trends often set the tone for the sector's growth trajectory.
Larsen and Toubro's Chief Financial Officer R Shankar Raman is anticipating a 10% increase in capital expenditure outgo in the upcoming budget for FY27. Amid concerns about sagging private capital expenditure growth, Raman said that he does not fear a 'crowding out' of resources because of the high spending by the state. The ample liquidity in the system will support such investments.
"They will possibly go for a 10 per cent increase...that is what I am anticipating, but that's at a personal level," he told PTI. There is already a jump in the way large infrastructure projects are getting conceived, Raman said, underlining that 'infrastructure has miles to go'.
The shares will be in focus due to the capex outlay in addition to the capital expenditure. While the focus on capex continues, the government has been increasing the capex target at a slower pace, given the medium-term fiscal consolidation path of the central government.
The Budget 2025 underscored continued emphasis on capital spending, with capital expenditure on the books at Rs 11.21 lakh crore for FY 2025-26, slightly higher than the revised Rs 10.18 lakh crore for the previous financial year.
When grants-in-aid for creation of capital assets are added, effective capital expenditure was projected at Rs 15.48 lakh crore in 2025-26, up from Rs 13.18 lakh crore in the revised estimates of the previous financial year.
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