L&T says company will soon get an order worth Rs 25,000 crore; stock rises

L&T share price: Shares of Larsen & Toubro (L&T), the engineering and construction conglomerate, rose over 1.5 per cent on Monday (September 4), after Group Chairman AM Naik, in an exclusive interaction with Zee Business channel, said that the company will soon receive a big order worth Rs 25,000 crore. The chairman also added that the company may receive a big order for the metro rail segment as well.

At 09:34 am, the stock was trading 1.08 per cent higher at Rs 2,730.55 levels. It eventually ended at Rs 2,714, up 0.47 per cent on the BSE.

The group chairman further said they have received a Rs 26,000 crore order for the bullet train project, the biggest so far for the company. Naik added that technology will keep changing, but there will always be a need for infrastructure. "Our 50–60 per cent work will always be in demand, and the rest, 40 per cent will keep fluctuating with changing times and technologies. We have top-class hi-tech hardware," Naik said in the exclusive interaction.

As regards green hydrogen, Naik said that the company has already started its work in the area. The chairman stated that L&T's 70 per cent of solar projects are from Saudi Arabia. "We don't have our own solar plants; we make solar plants for others," Naik said.

The work is in full swing in the wind power segment, AM Naik said further. The company receives one-third of its orders from foreign companies. Speaking about current management, Naik said the new management has good experience. "I mentored them for 11 years," Naik added. L&T's new leadership is excellent, the chairman said.

AM Naik added that L&T's foundation is very strong, and they do everything taking into account the future. "Shareholders have utmost faith in the company, and there are many shareholders who have never sold their shares in L&T," Naik said further.

L&T Q1 result

The construction major reported a 46.5 per cent year-on-year jump in its consolidated net profit at Rs 2,493 crore for the quarter ended June 30, 2023 (Q1 FY24). L&T's revenue from operations came in at Rs 47,882 crore for the first quarter of the current financial year, up 34 per cent compared with the corresponding period a year ago, according to a regulatory filing.

The infrastructure conglomerate reported Rs 4,869 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA), up 23 per cent compared with the year-ago period.

Besides, L&T's board declared a special dividend of Rs 6 per share and also announced a buyback worth Rs 10,000 crore. READ MORE

Post-Q1 result announcement, analysts at Prabhudas Lilladher, in their report dated July 26, said, they were building in 15 per cent revenue growth in core Engineering & Construction (E&C) business with more than 150 basis points (bps) margins improvement by FY25. 

"We continue to value L&T based on the SOTP method with core E&C business being valued at 25x FY25 PAT and add the value of listed subsidiaries based on a 20 per cent discount to current market cap. We also add the value of development business based on 0.8x P/B to arrive at our target price of Rs 2,892," they added.

L&T's share price

The shares of the company have jumped over 36 per cent in the past 12 months, Trendlyne data show.