L&T shares crash 7% as escalating Israel-Iran war spooks investors

The shares of engineering major Larsen & Toubro (L&T) tumbled more than 7% on Wednesday as the war in the Middle East continued to escalate with no signs of diplomatic resolution, raising investor worries about the company which has significant exposure to the Middle East.Middle East accounted for 33% of the order inflows, as part of the company’s Rs 3.46 lakh crore order book recorded in the first nine months of the financial year 2026. Domestic brokerage JM Financial said the engineering major could face execution disruptions in its Middle East projects, while a potential slowdown in UAE’s real estate market can intensify competition.

US President Donald Trump said on Tuesday that whatever remains of the Iranian leadership had agreed to engage in negotiations, but added, “It’s too late.” He further claimed that Iran’s “air defence, Air Force, Navy and leadership are gone.”

Earlier, Trump said he expects the conflict to continue for four to five weeks. Tensions escalated over the weekend after the US and Israel conducted military strikes against Iran, reportedly killing its Supreme Leader, Ayatollah Ali Khamenei. Iran subsequently launched retaliatory attacks across several parts of the oil-rich region.

Strait of Hormuz closes:

Additionally, tanker traffic through the Strait of Hormuz came to a halt following repeated attacks on vessels in the area. More than 20% of the world’s oil supply passes through the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea.

The disruption in sea lanes will also likely bear an impact on L&T’s project execution. The hostilities will also continue to dampen investor sentiment.

L&T’s Middle East exposure:

The Middle East is a strategically significant market for Larsen & Toubro, with a deep and long-standing business presence across the region spanning energy, infrastructure, renewables and technology. We are closely monitoring the evolving situation and confirm that all our employees, workers and assets on the ground are safe. Our Management Committee is being updated on a real-time basis by our on-ground teams, business partners and local State Administrations to ensure full situational awareness at all times,” L&T said in a statement.

L&T share price:

L&T shares have extended decline for the fourth consecutive session, falling more than 12% during the time to trade at a one-month low of Rs 3,760 apiece on Wednesday. The stock has declined more than 6% in the past one month, and is down over 7% in 2026 so far.

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