L&T Market Cap Exceeds Rs 4 Trillion; Reasons Given
The market capitalisation surpassed Rs 4 lakh crore on Friday as shares of engineering and construction firm Larsen and Toubro (L&T) set a career high after it received a $4 billion order from Saudi Aramco.
With a projection of 15%, this contract victory would help the engineering firm surpass a 20% rise in order inflows in FY24. The shares of L&T increased 2% on Friday to trade at Rs 2,901.60, ranking among the top gainers on the Nifty50.
L&T has received two engineering, procurement, and construction (EPC) contracts as part of Saudi Aramco’s second expansion phase of its Jafurah unconventional gas production project, according to MEED, previously known as the Middle East Economic Digest.
According to media sources, as part of the Jafurah unconventional gas production project, L&T has been charged with putting up a gas processing facility and its primary process units and will build gas compression units.
The strongest potential for L&T in the remaining months of FY24 is Middle East (ME) hydrocarbons, which should allay market worries over the much-anticipated slowdown in government orders in the fourth quarter of FY24 before the elections, according to a report from CLSA Asia Pacific Markets.
The target price for the share was increased by nearly 5% to 3,240 as it was said, “By the time orders are placed and EPS gets visible, we expect the stock to re-rate.”
L&T has reported order wins of $15,000 crore so far this quarter, on top of orders totaling $66,000 crore in the June quarter. “Including the above-mentioned orders, we expect order inflow for Q2 to be in a similar range,” said ICICI Securities. It also projects that the corporation would get 2.2 lakh crore in orders overall this year.
L&T’s first-ever share repurchase has helped the company’s stock rise by about 40% so far in 2023. Through a tender process, the company will buy back shares for 3,000 each.
