L&T Hits Lifetime High on Likely Aramco Order Win

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Major Deal Win Expected:

On the likelihood of receiving a roughly $4 billion order from Saudi Aramco, Larsen & Toubro (L&T) reached a lifetime high in Friday trade and crossed the Rs.4 Lakh crore market capitalization threshold.

This deal win is seen helping the engineering major clock in an over 20% growth in its order inflows in FY24, as against a guidance of 15%.

The order win from Saudi Aramco is reportedly for the second expansion phase of its Jafurah unconventional gas production project, and will be executed by L&T Energy Hydrocarbon. This division accounted for about a fifth of the company’s total order book of over ₹4 lakh crore as of the June quarter.

Stock Performance:

What’s in Store for Larsen & Turbo:

L&T has announced order wins worth ₹15,000 crore so far in the current quarter; this comes on top of orders worth ₹66,000 crore in the June quarter. “Including the above mentioned orders, we expect order inflow for Q2 to be in a similar range,” said ICICI Securities, which expects the total order inflow for the company to be ₹2.2 lakh crore this year.

The brokerage has upgraded the rating for the shares to ‘buy’ from ‘add’ earlier, raising target price by more than 14% to ₹3,141.
Shares of L&T are up nearly 40% so far in 2023, also supported by the company’s first ever share buyback. The conglomerate will buy back shares at ₹3,000 a piece via the tender route.

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