L&T stock at all-time high on Q1 results and buyback proposal

Engineering behemoth Larsen & Toubro’s stock touched all-time high of ₹2,673.85 on the NSE on Wednesday, driven by robust Q1 results and buyback proposal. The stock closed at ₹2,646.55 (up 3.3 per cent, over the previous day’s close. The strong results beat analysts’ estimates, who remained bullish and increased the target price for the stock.

On Tuesday, the company reported a strong 34 per cent/46 per cent year-on-year growth in revenue and adjusted PAT, driven by better execution in the projects and manufacturing segment owing to a strong opening order-book. Order inflow grew about 80 per cent year on year, with Infrastructure (100 per cent) and Energy (66 per cent) being the major contributors. Key segments for which orders were received were rail, renewables, rural water supply, and transmission and distribution.

• Also Read: L&T plans ₹10,000-cr buyback at maximum price of ₹3,000 a share

Its board has approved buyback of 3.33 crore shares at a maximum price of up to ₹3,000 a share for an aggregate consideration of up to ₹10,000 crore. The board also approved a special dividend of ₹ six a share.

Healthy order flow

L&T’s closing orderbook for the April-June quarter stood at ₹4,12,600 crore, up 14 per cent year on year. Analysts expect orderbook position to strengthen further in FY24. However, it is important to note that the L&T management has maintained its revenue guidance of 12-15 per cent growth and 10-12 per cent growth in order inflow for FY24 considering the possible softening in awarding activity in Q4FY24 due to the general elections.

• Also Read: L&T’s Q1 net profit rises 46% beating street estimates

What’s also a key positive is that analysts are upbeat about the order prospects for the nine months of FY24 which are up 34 per cent - largely backed by international hydrocarbon projects. International orders comprised 42 per cent of total order inflow.

Amit, Anwani, Research Analyst, Prabhudas Lilladher, said: “We believe L&T is well-placed to benefit in long run with strong tender prospects, better order conversion in domestic market, significant traction in hydrocarbon and renewable energy orders from international markets like Saudi Arabia and expected uptick in private capex in domestic market.”