New Delhi, March 9 -- Larsen & Toubro Ltd's (L&T) shares have fallen nearly 8% over the past week in reaction to the conflict in the Middle East after Iran faced a joint attack by the US and Israel. The engineering company's significant exposure to the region in terms of orders and revenues is bad news for its investors. There are worries about deferment or cancellation of new orders and execution delays in ongoing projects amid disruptions to shipping routes.

Over a decade ago, domestic projects had dominated L&T's business, but the picture is different now. As on 31 December, 49% of its Rs.7.33 trillion order book came from international markets, and India contributed the rest. The Middle East accounts for 75.5% of the international or...