Shares of this large-cap infrastructure company are attracting investor focus following the acquisition of several major contracts in Middle Eastern countries for the establishment of substations and transmission lines for interconnected electricity networks.
Share Price Movement
In Tuesday’s trading session, the share price of Larsen & Toubro (L&T) gained more than 1 percent reaching an intra-day high of Rs.3,830 per share from its previous close of Rs.3,787.45 apiece.
What happened
The Power Transmission & Distribution (PT&D) vertical of Larsen & Toubro secured new orders in the Middle East on September 24 for the expansion and strengthening of high-voltage electricity grids.
In Saudi Arabia, operating regions of the national electricity network are being connected through High Voltage Direct Current (HVDC) links, enabling power exchange and enhancing system resilience. Larsen & Toubro has secured contracts to establish ±500kV HVDC transmission links for these interconnections.
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Additionally, L&T has won contracts for three more packages, including two 380kV overhead transmission lines and a bulk supply 380kV gas-insulated substation. These components significantly contribute to the interconnection of renewable generation and the fortification of the grid.
In Abu Dhabi, Larsen & Toubro (L&T) has been awarded a contract to construct two major 400kV Gas Insulated Substations. The project includes civil work, a series of Current Limiting Reactors, Auto Transformers, and control and protection systems, as well as integration with the Load Dispatch Centre.
Order Book
As of Q1 FY25, the total order book stands at Rs.4.91 trillion, reflecting a 19 percent year-on-year increase. Of this, 62 percent is from domestic orders and 38 percent from international sources, with 92 percent of international orders originating from the Middle East.
New Developments
L&T Semiconductor Technology Limited has acquired a 100 percent stake in Silicon Systems, boosting its chip development capabilities for CCTV systems. The company is also pursuing EPC opportunities in the Oil to Chemicals sector in the Middle East, anticipating investments of $50 billion to $60 billion from clients.
Management Guidance
Management guidance indicates that the group-level EBITDA margin will be maintained at 10.2 percent. The margin forecast for the P&M (Plant and Machinery) segment is set at 8.2 percent to 8.25 percent for FY ’25, with expectations for slight improvement based on project execution and job Tmix.
Financials
In its Q1 FY25 financial results, Larsen & Toubro Ltd reported revenue of Rs.55,120 crore, reflecting a 15.11 percent increase from Rs.47,882 crore in the same quarter of the previous year. The Profit After Tax (PAT) grew by 11.3 percent to Rs.3,445 crore, up from Rs.3,096 crore in the corresponding quarter of the previous year.
Company Profile
Larsen & Toubro Ltd is a global conglomerate primarily focused on delivering engineering, procurement, and construction (EPC) solutions.
The company operates in several critical sectors, including Infrastructure, Hydrocarbon, Power, Process Industries, Defence, Information Technology, and Financial Services, serving both domestic and international markets.
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Written by – Siddesh S Raskar
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