L&T Share Price Rises on Winning Major Orders; CLSA Increases Target Price

Larsen & Toubro (L&T) saw its share price trading in positive territory on October 5 following significant contract wins by its Buildings & Factories business, ranging from Rs 2,500 to 5,000 crore. The Buildings & Factories division of L&T secured several large orders across its various business units.

The business secured an order to construct a residential township in Bengaluru, involving the construction of 3,627 apartments spread across 19 towers. These towers will have configurations of 3 basements, ground floors, and 23 to 41 additional floors, along with 88 villas, clubhouses, swimming pools, and other amenities. The total built-up area for this project will be approximately 9.7 million sq.ft.

Additionally, the business secured contracts from a reputed developer to construct commercial towers in Hyderabad. This scope of work includes the construction of two buildings with a combined built-up area of 4.2 million square feet.

Furthermore, an order was received from the Indian Institute of Technology, Kanpur, to construct a Super Specialty Hospital and an Academic Block as part of the Gangwal School of Medical Sciences and Technology. This project includes the construction of a 500-bedded hospital block and an academic block, both with five floors.

CLSA, a foreign brokerage firm, has maintained a buy rating on L&T’s stock and raised the target price to Rs 3,600 per share. CLSA emphasized that L&T’s outlook remains robust, as the company recently secured an additional $1.5 billion in orders for Mumbai infrastructure projects over the past seven days. The brokerage firm believes that L&T is likely to achieve 50% of its FY24 guidance inflow in the first half of the fiscal year.

CLSA has also increased its estimate for the Engineering & Construction (E&C) segment’s CY25-26 EPS by 4-5% based on a lifted CY24 inflow forecast by 5%.

In a separate announcement on October 4, L&T disclosed that its power business arm had secured an order worth up to Rs 2,500 crore from the West Bengal Power Development Corporation Limited. This Engineering, Procurement, and Construction (EPC) order pertains to the establishment of wet Flue Gas Desulphurisation (FGD) systems for the Thermal Power Plant at Sagardighi in West Bengal.

L&T continues to make significant strides in securing major contracts, further solidifying its position in the engineering and construction industry.

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