L&T shares surge 3% as Brigade deal brings largest private residential project win

Given the recent rally, L&T shares have gained over 7 percent this week.

Shares of Larsen & Toubro jumped 3 percent to Rs 3,455 on March 21 after the company clinched a major contract worth Rs 2,500 crore to Rs 5,000 crore from Brigade Group. The deal, which involves constructing high-rise residential and commercial towers in Hyderabad and Chennai, marks L&T’s biggest private residential project win to date, fueling investor optimism.

In Hyderabad’s Kokapet area, L&T will build Brigade Gateway Residences, featuring two luxury towers, including one of the city’s tallest buildings, standing at 57 floors above ground. Alongside, the company will construct Brigade World Trade Centre, a 50-floor commercial tower rising over 200 meters. The project, which also includes retail space and a five-star hotel, is set to be the tallest mixed-use development in the city.

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In Chennai, the contract includes Brigade Altius, a high-end residential project with three signature towers of 39 floors each, built atop six levels of parking. Additionally, Brigade Morgan Heights will feature ten luxury towers, with apartment floors ranging between 11 and 21 stories, supported by four levels of parking.

All projects will be executed on a design-and-build basis within stringent timelines. The deal strengthens L&T’s foothold in India’s premium residential and commercial real estate sector at a time when demand for high-rise living and integrated workspaces is on the rise.

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This is the second order win in quick succession. Last week, its Water & Effluent Treatment (WET) business, in partnership with Spain’s Lantania, secured a contract worth up to Rs 5,000 crore from ACWA Power to build the Ras Mohaisen Desalination Plant in Saudi Arabia. The facility, designed to produce 300,000 cubic meters of water per day, will be built using seawater reverse osmosis technology. The project scope includes design, procurement, construction, testing, and commissioning.

The company reported a 14 percent rise in net profit to Rs 3,359 crore for the December quarter, compared to Rs 2,947 crore a year ago. Revenue climbed 17 percent to Rs 64,668 crore, up from Rs 55,128 crore in Q3 FY24.

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However, the company’s performance fell short of market expectations, as EBITDA margins contracted by 70 basis points year-on-year to 9.7 percent. The decline was primarily due to a 50 percent surge in raw material costs and a 16 percent increase in construction material expenses during the quarter.

Shares of the company closed at Rs 3,415, higher by 1.91 percent from the last close on the NSE. Given the recent rally, L&T shares have gained over 7 percent this week.