L&T trades higher for seventh straight day; stock hits over 9-month high

Shares of Larsen & Toubro (L&T) were trading higher for the seventh straight session on Friday, up 2 per cent at Rs 1,217 on the BSE, amid expectation that awarding momentum may pick up going forward.

Stock of the construction & engineering major was trading at its highest level since February 26, 2020. In the past one month, L&T has outperformed the market by gaining 15 per cent as against a 6-per cent rise in the S&P BSE Sensex.

L&T on Monday said it received order for supply of 90 units of Komatsu Mining Equipment from Coal India subsidiaries, leading infra companies engaged with the coal sector and customers from the cement and iron ore sectors. The company, however, did not disclose the value of the orders received.

Last month, the company's various business segments secured multiple orders. The company’s construction and mining equipment business bagged one of its biggest orders ever to supply 46 units of Komatsu mining equipment to Tata Steel.

Meanwhile, the transportation infrastructure business secured another mega contract from the National High-Speed Rail Corporation Limited (NHSRCL) to construct 87.569 km of the Mumbai-Ahmedabad High Speed Rail (MAHSR) project, popularly referred to as the bullet train project.

L&T Construction, the construction arm of L&T, has secured a large contract to construct India's longest road bridge across river Brahmaputra connecting Dhubri in Assam to Phulbari in Meghalaya.

"Going ahead, tender pipeline looks encouraging with around Rs 6 trillion (domestic- Rs 4.7 trillion, international - Rs 1.3 trillion) projects in bid pipeline focusing on key sectors such as Water, Power T&D, Metro/RRTS, Railways, Roads and Expressways. We believe that L&T is well-placed to emerge stronger given its financial, technical and managerial capability to sustain and gain market share. The company continues to focus on its strategic plan of asset monetization and improving return ratios," analysts at Prabhudas Lilladher said in a report.

"As labour availability and on-ground execution conditions reach normalcy, we expect sustained improvement in L&T's H2 and FY22 revenue and margin performance. Working capital levels remain elevated but stable and are supported by government's liquidity enhancement measures," analysts at Centrum Broking said in Q2 result update.