West Asia tensions rattle capital items shares; L&T, KEC slide

ET Intelligence Group: The shares of engineering and capital items corporations having publicity to the West Asia are beneath strain since February 27 amid the battle between Iran and Israel. The BSE Capital Items index has fallen by almost 4% in three buying and selling periods to March 04, pushed by considerations over doable cancellations of initiatives within the area that will shrink the order e book and restrict the income visibility or delays so as execution thereby eroding profitability.

Amongst these shares, Larsen and Toubro has fallen sharply by over 9% within the mentioned interval given its vital publicity to the West Asia international locations. As of December 2025, the corporate had an impressive order e book price ‘7.3 lakh crore. Of this, ‘2.7 lakh crore or 37% was from West Asia in contrast with 21% three years in the past. As well as, the area accounted for 76% of the worldwide orders within the newest December quarter. Over the previous three years, dimension of the order e book from the area has grown at a quicker charge. Between December 2022 and December 2025, the West Asia order e book grew at a compounded annual progress charge (CAGR) of 49.5% in contrast with 23.8% for the whole order e book.

In West Asia, L&T has main contracts in Saudi Arabia in areas together with hydrocarbons and energy transmission and distribution. “Whereas it’s tough to evaluate the present scenario, we estimate that L&T’s core earnings will probably be negatively impacted by 11-12% for FY27 and FY28, assuming a three-month execution delay and low order influx primarily within the hydrocarbon section,” talked about Emkay International Monetary Providers in a report.

KEC Worldwide is one other firm more likely to be affected by the battle because it attracts an estimated 20% of its almost ‘37,000 crore price of excellent order e book from the area. In response to Emkay, KEC’s factories within the United Arab Emirates (UAE) are shut amid the battle, implying a income hit of ’50 crore per day. Assuming a three-month delay in execution, the broking agency estimates 3-4% hit on earnings for FY27 and FY28. KEC’s inventory has misplaced almost 9% since February 26.

Within the case of Kalpataru Initiatives Internationalthe affect is anticipated to be restricted since its present mission within the area is within the remaining stage. The corporate has bid for 5 initiatives within the area as of December and their awarding could also be delayed because of the present scenario thereby decreasing income visibility.

Amongst different corporations, Engineers India (EIL) has publicity to West Asian markets with consultancy assignments. “Escalation in regional tensions might delay contemporary mission awards, elongate tender finalization timelines, and reasonable consultancy inflows within the close to time period,” acknowledged PL Capital in a report. The inventory has misplaced almost 9% prior to now three buying and selling periods.