Engineering major Larsen & Toubro (L&T) was in buzz during the early trading hours on Tuesday after the company bagged multiple orders for its hydrocarbon business. The stock was among the top gainers of the BSE’s benchmark Sensex
The hydrocarbon business of L&T, namely L&T Energy Hydrocarbon (LTEH), has secured multiple offshore packages from a prestigious overseas client, the company said in its media release. The scope of work comprises engineering, procurement, construction & installation of offshore structures and upgradation of existing facilities, it said.
Following the announcement, shares of Larsen & Toubro rose more than 2 per cent to Rs 2,221, with the company commanding a total market cap close to Rs 3.12 lakh crore. The scrip settled at Rs 2,178.20 on Monday.
L&T has classified these projects in the ‘major’ category which are valued between Rs 5,000-7,000 crore each. LTEH is executing several domestic and international offshore projects and is committed to building its regional presence in geographies.
Larsen & Toubro is an Indian multinational engaged in EPC Projects, Hi-Tech manufacturing and services, which operates in over 50 countries worldwide.
Brokerage firms are positive about the company and suggest buying it. Global investment banker Citi has maintained a ‘buy’ on L&T with a target price of Rs 2,630 apiece, while Emkay Global pegs its value at Rs 2,303 with the same rating.
L&T by virtue of its leadership and diversified offerings in the EPC domain would be a key beneficiary of the government’s infrastructure thrust and capex revival in private sectors. Further, increased investments in infrastructure and hydrocarbons in the GCC region provide diverse opportunities, said Sharekhan.
“Given the strong order book and order prospects of Rs 4.87 trillion for Q4FY2023, we expect robust execution going forward. Multiple margin tailwinds – easing supply chain, stable commodity prices, and higher margin orders indicate margin recovery from FY2024,” it said with a buy rating and target price of Rs 2,600.
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