L&T gains 2%, scales to an all-time high on multiple order wins

Shares of Larsen and Toubro (L&T) surged 1.7 per cent to touch a fresh lifetime high of Rs 2,725 per share on the BSE in Wednesday's intra-day trade after its power and distribution business secured large (in the range of Rs 2,500-5,000 crore) orders in the Middle East.
 

So far in the calendar year 2023 (CY23), the stock of this engineering company has surged 30.6 per cent, as against 7 per cent rise in the S&P BSE Sensex.
 

In an exchange filing on August 23, the company said that the power and distribution business received an order to establish 220 kilovat (kV) gas insulated substation and associated transmission lines to the United Arab Emirates energy industry.
 

 

Additionally, orders to establish 2 new 132 kV sub-stations were received from a public infrastructure company in Dubai and another order to build a 220 kV overhead transmission line was secured in the region.
 

In Kuwait, meanwhile, turnkey construction of 4 new 132 kV sub-stations was completed in the Al Sabah Medical District. The scope also includes associated control, protection, automation and communication systems and related civil & mechanical works.

Earlier, on August 21, L&T's Energy and Hydrocarbon arm won significant order (in the range of Rs 1,000-2,500 crore) order for Perdaman’s Urea Plant in Australia.

"The plant will be constructed on the Burrup Peninsula, approximately 20 kilometers north of Karratha, Western Australia. On completion, this state-of-the-art facility will be the largest urea plant in Australia and one of the largest in the world," the company said in an exchange filing.
 

In the recently concluded June quarter, L&T's standalone revenue rose 21.7 per cent year-on-year (YoY) to Rs 20,211 crore, while earnings before interest, tax, depreciation, and amortisation (Ebitda) increased 11.7 per cent YoY to Rs 1,561 crore.
 

Analysts at ICICI Securities remain bullish on the counter, expecting good revenue visibility in the coming years.
 

"L&T has targeted revenues and order inflow compounded annual growth rate (CAGR) of 15 per cent and 14 per cent respectively over FY21-FY26 with a consolidated return on equity (RoE) of 18 per cent," the brokerage firm added in a result review note.
 

Analysts at LKP Securities, too, remain positive on L&T's prospects, highlighting the stock to be the best proxy for domestic capex play with healthy order-books.
 

"L&T’s ‘Lakshya 2026 Plan’ is focusing on scaling up new business opportunities, which are now in the incubation phase and are expected to bring significant benefits in future," the brokerage firm added.