L&T extends gains:
Shares of Larsen & Toubro (L&T) were up 1 per cent at Rs 2,240 on BSE in Thursday’s intra-day trade in an otherwise weak market. The civil construction company’s stock gained 3 per cent for the third straight day on winning orders worth Rs 9,500 crore.
In comparison, the S&P BSE Sensex was up 0.07 per cent at 58,257 at 10:29 am. L&T touched a record high of Rs 2,297.30 on Jan 20, 2023.
L&T on Wednesday said its construction arm has bagged significant orders (ranging from Rs 1,000 to Rs 2,500 crore) for its water and wastewater treatment and buildings and factories businesses.
L&T Construction has again secured an order from the Department of Drinking Water and Sanitation, Government of Jharkhand to execute on turnkey basis the raw water transportation system from the proposed intake from Neghra, Rajmahal in Sahibganj district to Sunder Dam in Godda district.
The Buildings and Factories business of L&T Construction has bagged an order from a reputed developer to construct a residential tower in Bengaluru. The company said the project has to be executed within a tight timeline.
Earlier, L&T on Tuesday announced that the company’s Hydrocarbons business (L&T Energy Hydrocarbons) has bagged major contracts (ranging from Rs 5,000 crore to Rs 7,000 crore) for several offshore packages from a reputed overseas customer. The scope of work includes setting up of EPC and offshore structures and upgradation of existing facilities.
The company did not disclose the exact value of the order. The principal value of the contract is in the range of Rs 5,000 crore to Rs 7,000 crore as per the project classification of L&T. According to L&T, the value of the important project is between Rs 1,000 crore to Rs 2,500 crore.
Meanwhile, in another development, L&T has entered into a binding electrolyser manufacturing agreement with McAfee Energy, a France-based leading electrolyser technology and manufacturing company, for a long-term partnership to explore the opportunities emerging in the emerging green hydrogen market. Have done Under this partnership, McPhy will grant L&T an exclusive license of its Pressurized Alkaline Electrolyzer technology to manufacture the electrolyzer, including future product upgrades. L&T plans to set up a gigawatt-scale manufacturing facility for electrolyzers based on McAfee technology in India to meet domestic requirements as well as other selected geographies.
ICICI Securities said in a note that the proposed agreement is in line with L&T’s strategic vision to be present in the green energy value chain and increase the share of new business areas such as high tech manufacturing.
L&T’s total ordering prospects/pipeline for Q4FY23E stands at Rs 4.87 trillion, comprising of Rs 3.82 trillion domestic and Rs 1.05 trillion international pipeline. With an order backlog of Rs 3.87 trillion and a strong order inflow of Rs 1.54 trillion for 9MFY23 and improving margins, ICICI Securities expects L&T to achieve revenue and EBITDA CAGR of 15.1 per cent and 16.6 per cent, respectively, in FY2022-25E Will do
L&T, the engineering giant, with its decades of experience and strong track record in engineering and construction is set to be a key beneficiary of the capex upcycle driven by investments in both the public and private sectors.
In the longer term, L&T with its diversified businesses across sectors such as infrastructure, heavy engineering, hydrocarbons, defence, IT as well as green energy is at the forefront of benefiting from the Atmanirbhar Bharat plan. Brokerage firm Sharkhan said the company is the best proxy for domestic capex upcycle.
