Larsen & Toubro (L&T), traditionally known for its engineering, construction and infrastructure businesses, is positioning itself to participate in two of the fastest-growing technology segments: semiconductors and artificial intelligence infrastructure. The opportunity has also found mention in Religare Broking’s Diwali Picks 2026 report, titled Beyond Market Volatility: Identifying the Next Earnings Outperformers. The report identifies semiconductor-related activities and AI data centres among L&T’s emerging businesses, which could provide growth opportunities beyond its traditional engineering and construction operations.
While these businesses are still evolving, L&T’s initiatives indicate an effort to build capabilities across the semiconductor value chain and the infrastructure required to support the growing demand for artificial intelligence.
Building a semiconductor business
A key part of this strategy is L&T Semiconductor Technologies (LTSCT), the company’s wholly owned subsidiary and fabless semiconductor business. It is developing a portfolio of semiconductor products and smart devices catering to mobility, industrial, energy and data centre applications.
Unlike companies setting up semiconductor fabrication facilities, LTSCT’s business model focuses on chip design, intellectual property and technology partnerships, allowing it to develop products for global customers.
The company has been strengthening its capabilities through partnerships and acquisitions. In particular, it acquired the power module design assets of Japan’s Fujitsu General Electronics, including its power semiconductor research and development team, design patents, specialised equipment and intellectual property.
LTSCT has also entered into a partnership with Taiwan-based Azuremoto Technologies to advance silicon carbide (SiC) and power semiconductor solutions. The collaboration targets applications such as AI data centre power supplies, server power architecture and uninterruptible power supply systems.
These developments highlight the growing intersection between semiconductor technology and the infrastructure supporting AI workloads.
AI data centres emerge as another growth opportunity
Alongside semiconductors, L&T is expanding its presence in AI-ready data centre infrastructure through Larsen & Toubro Vyoma, its digital infrastructure and cloud services business.
The company is pursuing opportunities in hyperscale data centres, sovereign cloud platforms and high-performance computing infrastructure.
In February 2026, L&T announced a proposed partnership with NVIDIA to build gigawatt-scale AI factory infrastructure in India under the IndiaAI Mission. The initiative aims to combine L&T’s engineering and infrastructure capabilities with NVIDIA’s accelerated computing platforms to support large-scale AI workloads.
The company has also announced plans for a 40 MW green, AI-ready data centre in Navi Mumbai, forming part of a proposed 100 MW campus.
These investments reflect the growing infrastructure requirements of generative AI, cloud computing and enterprise AI adoption.
Strong order book provides a foundation
Religare’s report also highlights L&T’s established infrastructure business as an important source of growth visibility.
The company’s order book increased 28% year-on-year to Rs 8.54 lakh crore at the end of Q2FY27. Order inflows stood at Rs 1.48 lakh crore during the quarter.
Religare expects L&T’s revenue from operations to increase from Rs 2.86 lakh crore in FY26 to Rs 3.62 lakh crore in FY28, implying a compound annual growth rate of approximately 12.5%.
The brokerage estimates profit attributable to owners to rise from Rs 16,084 crore in FY26 to Rs 22,569 crore in FY28.
Religare has assigned a BUY rating to L&T with a target price of Rs 4,510, against a market price of Rs 3,872 as on October 30, 2026.
However, the brokerage cautions that the contribution of emerging businesses such as semiconductors and AI data centres will depend on execution, investment requirements and commercial viability.
Beyond traditional engineering
For L&T, the opportunity extends beyond building physical infrastructure. Its semiconductor initiatives could help it participate in chip design and power electronics, while its AI data centre investments could position it in the rapidly expanding computing infrastructure market.
The scale at which these businesses contribute to consolidated earnings remains to be seen. Nevertheless, their development signals a broader shift in L&T’s business portfolio as it looks to participate in India’s evolving technology ecosystem.
The coming years will be important in determining whether these emerging businesses can develop into meaningful contributors to the company’s growth beyond its traditional engineering franchise.
