 "Larsen & Toubro gains 2% on winning 'major' order from Middle East client")
Shares of Larsen & Toubro (L&T) gained 2 per cent to Rs 3,611 on the BSE in Thursday's intraday trade after the civil construction company said it has secured a 'major' onshore gas pipeline project from a prestigious client in the Middle East.
L&T classifies orders ranging between Rs 5,000 crore and Rs 10,000 crore as 'major' orders.
The scope of work comprises engineering, procurement, and construction of two new 56" Pipelines along with associated scraper receivers and launchers, and main line isolation valve (MLIV) stations running parallel to the existing pipeline corridor, L&T said in an exchange filing.
The order is won by the company's Hydrocarbon vertical (L&T Energy Hydrocarbon – LTEH).
Earlier, on Wednesday, L&T had announced that its Buildings & Factories (B&F) vertical has secured a 'significant' order from the All-India Institute of Medical Sciences (AIIMS), Madurai, Tamil Nadu under the PMSSY division, Ministry of Health and Family Welfare, Government of India.
The scope of work involves civil structure, finishes, MEP services, and external development, including landscaping.
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Moreover, on March 7, LTEH vertical had secured a 'significant' order from the Oil & Natural Gas Corporation (ONGC) for the MHN TCPP PGC BGC Project (MTPBP), off India’s West Coast.
L&T classifies orders ranging between Rs 1,000 crore and Rs 2,500 crore as 'significant' orders.
In the past one month, L&T has outperformed the market by surging nearly 10 per cent, as compared to 1.5 per cent rise in the S&P BSE Sensex. In the past six months, the stock has rallied 23 per cent, as against 8 per cent gain in the benchmark index. The stock had hit a record high of Rs 3,738.90 on January 30, 2024.
Analysts at BNP Paribas India expect Indian infrastructure investments to remain elevated in the near to long term, driven by government investments, especially in power transmission, generation (thermal and renewable), defence, transport infra (roads, railways, and metro), and water sectors.
The brokerage firm expects L&T to be a key beneficiary of these investments and estimates tendering prospects of Rs 15 trillion and order inflows of over Rs 2.7 trillion by FY26. "We are positive on the stock, led by strong order inflow prospects and potential Ebitda margin recovery. Furthermore, its exit from development assets such as Nabha Power and Hyderabad Metro should push L&T's ROE above its target of over 18 per cent by FY26 (vs 12 per cent in FY23)," the brokerage firm said.