Synopsis:
Larsen & Toubro is in focus as it has formed a strategic partnership with Bharat Electronics Limited to jointly contribute to India’s 5th-generation fighter aircraft. The collaboration between these two giants strengthens the Indian defence production sector, which will strongly contribute to India’s ‘Atmanirbhar Bharat’ initiative.
The shares of this leading infra major are in focus as it inks a major strategic partnership with this Navratna PSU. In this article, we will dive into the details of this partnership.
With a market capitalization of Rs 5,04,538 crore, the shares of Larsen & Toubro Ltd. made a day’s high of Rs 3687.35 per share, up 0.8 percent from its previous day closing price of Rs 3658.30 per share. Over the past five years, the stock has delivered a robust return of 313 percent, outperforming NIFTY 50’s return of 127 percent.
About the Partnership
Larsen & Toubro (L&T), through a stock exchange filing, announced that it, along with Bharat Electronics Limited (BEL), has formed a strategic partnership to support the Advanced Medium Combat Aircraft (AMCA) program of the Indian Air Force.
The statement said that the consortium will meet the Aeronautical Development Agency (ADA) requirements of the forthcoming Expression of Interest (EoI) to be issued, thereby effectively responding to the notice. The synergy derives from L&T’s large defence and aerospace expertise, complementing BEL’s stability in defence electronics and mission systems.
The step is being considered one of the significant moves that open the way to India’s defence manufacturing under the government’s ‘Atmanirbhar Bharat’ initiative, which is geared towards nurturing home-grown capacities and cutting off the reliance on imports.
Also read: Buy or Sell: 3 Stocks to Keep on Your Radar as Morgan Stanley Sets New Target Prices
Financial Highlights
The company reported a revenue of Rs 2,55,734 crores in FY25, up by 16 percent from its FY24 revenue of Rs 2,21,113 crores. Coming to its profitability, it reported a net profit growth of 14 percent to Rs 17,673 crores in FY25 from Rs 15,547 crores in FY24.
The stock has delivered an ROE and ROCE of 16.55 percent and 14.49 percent respectively, and is currently trading at a P/E of 32.41x as compared to its industry average of 20.83x.
As of Q1 FY26, the company has a robust order book of Rs 6,12,800 crore, up by 25 percent from its Q1 FY25 order book of Rs 4,90,900 crore. Almost 54 percent of its orders are derived from domestic clients, and the remaining 46 percent is derived from its international clients.
Order inflow for the year grew by a staggering 33 percent and currently stands at Rs 94,500 crore as compared to Rs 70,900 crore in Q1 FY25. Here is also the major order that was sourced from domestic clients.
Larsen & Toubro Limited (L&T) was founded in 1938 and is headquartered in Mumbai, India. It is a global engineering, construction, and manufacturing company. Its key segments include infrastructure projects, energy projects, and h-tech manufacturing. L&T also provides IT and technology services, financial services, and infrastructure development, along with manufacturing industrial equipment.
The company has a Hi-Tech Manufacturing segment, which has been a vital part of the Defence and Aerospace field. This unit is mainly involved in developing and manufacturing custom-engineered critical hardware, complete technical systems in the field of aeronautics, and all types of innovation in the areas of Precision products and electronics by applying such technologies as defence, security, space, nuclear energy, and advanced hydrogen sectors to provide an all-round solution for customers.
Written by Satyajeet Mukherjee
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
