Larsen & Toubro hits 52-week high as firm wins significant order for Hydrocarbon Business

Stock Markets Today: Shares of engineering and construction major Larsen & Toubro (L&T) rose as much as 1.97 per cent on April 10 to hit a 52-week high of Rs 2,319.65 apiece on the BSE after the company informed that its Hydrocarbon Business (L&T Energy Hydrocarbon – LTEH) has recently secured an order under its AdVENT (Advanced Value Engineering and Technology) business vertical.

At 01:51 pm, the stock was trading 1.46 per cent higher at Rs 2,307.95 on the exchange. In comparison, the benchmark S&P BSE Sensex was trading 0.23 per cent higher at 59,969.68 points. 

In its press release issued on April 10, the company said, "The order is for license plus engineering, procurement and construction (L - EPC) of a Technical Ammonium Nitrate (TAN) plant along with Weak Nitric Acid (WNA) plant at Gadepan, Kota, Rajasthan from Chambal Fertilisers and Chemicals Limited (CFCL), a leading fertilizer company in India."

The TAN and WNA plants, having capacities of approximately 240,000 Metric Tons (MT) p.a. and 2,10,000 MT p.a. respectively, will be built under a technology license from CASALE S.A., a privately owned Swiss Company headquartered in Lugano, Switzerland, the press release stated. 

HDFC Securities, in its report, dated April 10, wrote that the NHAI had set a target of awarding 6,500 km in FY23, of which it awarded ~3,750 Km (vs. 6,306 Km in FY22) at an NHAI cost of Rs 1 trillion. During the year, the report said, "Hybrid Annuity Model (HAM) continued to be its preferred mode of awarding with 75/31/3 projects awarded on HAM/EPC/another basis. Competitive intensity reduced towards the FY23 end as developers maintained calibrated aggression. Non-road players outperformed their inflow guidance, while road players need to catch up on missed guidance."

Further, it wrote that tier-1 infrastructure companies are trading at nearly 9.5x FY25E EPS and it expects the competitive intensity to reduce further. "Infrastructure asset creation is the top priority, which may lead to robust ordering. Top Picks: KNR, PNC Infra, HG Infra and NCC. Within the Capital Goods, L&T, Cummins India and Kalpataru are our preferred picks," the brokerage said.