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L&T hits 52-week high after construction arm bags orders in India & abroad

The power transmission & distribution business has bagged an order for the turnkey construction of a sub-station in Saudi Arabia.

August 30, 2021 / 12:00 PM IST
 
 
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Larsen & Toubro (L&T) share price touched a 52-week high of Rs 1,679.90, up 2.5 percent intraday after its construction arm won a slew of orders.

"L&T Construction, the construction arm of L&T has won a slew of orders in India and abroad for its various businesses," as per the company release.

The buildings & factories business has secured an order to construct multi-level parking and advocates chamber for The Hon'ble High Court at Allahabad with an approximate built-up area of 20 Lakhs Sq. ft.

The scope of work involves design, engineering, procurement, and construction of civil and related MEP works. The project is scheduled to be completed in 27 months.

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The power transmission & distribution business has bagged an order for the turnkey construction of a substation in Saudi Arabia.

The scope of the gas insulated substation project involving four different voltage levels up to 380kV comprises the associated control, protection, automation, telecommunication systems and civil & electromechanical works.

The smart world & communication business of the company has bagged yet another Smart City project, awarded by the Moradabad Smart City Limited.

"L&T is our top pick in the wider capital goods space as a proxy to play India’s capex story. So far, weak order inflows have impacted

the stock’s performance, but will gain momentum once final awarding picks up," said Motilal Oswal in its research report.

We estimate an FY21-24E EPS CAGR of 24%, driven by 15% CAGR in the core E&C business and declining loss from the Hyderabad Metro. Over last one month, L&T Infotech/ Mindtree/ L&T Technology Services rallied by ~18%/~28%/~11%. Factoring in the CMP of the listed subsidiaries (holding company discount of 20%), our target price for L&T now stands at Rs 1,950.

Adjusted for the valuation of subsidiaries, the core business is available at 14.3x FY23E PE v/s its long-term one-year forward average P/E multiple of 22x. We maintain our buy rating, it added.

At 10:32 hrs Larsen & Toubro was quoting at Rs 1,683.15, up Rs 45.50, or 2.78 percent on the BSE.
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first published: Aug 30, 2021 10:49 am
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