This Bluechip’s Infra stock, which deals in the business of providing EPC solutions in sectors such as Infrastructure, Power, Hydrocarbon, Defence, and others, is in focus after receiving Large orders worth upto ~Rs. 5,000 crore for Water & Effluent Treatment Business.
Share Price Movement
In Thursday’s trading session, the share price of Larsen & Toubro touched a day’s high of Rs. 3,233.95 per share which is up by 1.25 percent. The stock reiterated from the day’s high and was trading at Rs. 3,215.00 per share, which is 0.66 percent higher than the previous closing price of Rs. 3,193.90 per share. The stock has delivered a negative return of 9 percent in the past year, thus underperforming the Nifty Index.
What happened
The company’s stock is in focus after Larsen & Toubro received a Large order (Rs. 2,500 to Rs. 5,000 crore) along with Lantania of Spain from ACWA Power, a major developer in the Middle East, to build the Ras Mohaisen Desalination plant in the Kingdom of Saudi Arabia.
Water & Effluent Treatment (WET) segment had won the order in a joint venture with Lantania of Spain (Lead partner). Ras Mohaisen Desalination plant is to have a 3,00,000m3/day capacity. This project includes design, construction, procurement, testing, and commissioning of a seawater reverse osmosis desalination plant.
It includes intake and outfall facilities, pumping stations, process units, 600,000 cubic meters of potable water storage facility, electrical special facility, and associated works along with automation and instrumentation systems, along with a Solar PV plant.
The plant will serve as a drinking water source for Makkah Al-Mukarramah and Al-Baha regions, which can benefit about 1 million population.
Order Book Analysis
As of Q3FY25, the total order book stands at Rs.5,64,223 crore, up 20 percent year on year. Out of this, 58 percent is from India, 35 percent from the Middle East and the remaining 7 percent is from the rest of the world. 64 percent of this includes infrastructure, 26 percent from energy, 7 percent from Hi-Tech Manufacturing, and 3 percent from others.
During the Q3FY25 quarter, on a year-on-year basis, the company received orders for the Energy segment, which grew by 192 percent, the Hi-Tech Manufacturing segment grew by 312 percent, Development Projects grew by 18 percent, Realty grew by 109 percent and Other Businesses grew by 12 percent.
Management Guidance
The Management is confident to achieve the guidance which indicates that the order inflow is expected to exceed 10 percent growth for the FY25, with margins of around 8.2 percent, and revenue of 15 percent.
Financials & Ratios
In its Q3FY25 financial results, L&T reported revenue of Rs.64,667.78 crore, a 17.30 percent increase from Rs.55,127.82 crore in the same quarter of the previous year. The Profit After Tax grew by 11.76 percent to Rs. 4,771.83 crore, up from Rs. 5,555.09 crore in the same quarter of the previous year.
The debt-to-equity ratio for Q3FY25 stood at 1.18 times, the Net Profit Margin stood at 6.15 percent, and the Operating Margin declined to 9.67 percent.
Company Profile
Larsen & Toubro Limited is a major Indian multinational conglomerate engaged in the business of engineering, technology, manufacturing, and construction. With operations in over 50 countries, they offer integrated solutions across key sectors such as hydrocarbon, infrastructure, and defence.
Written by – Santhosh S
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