Building blocks in place for L&T stock to outperform

Improving balance sheet, likely rise in order flows and attractive valuations are among key positives

Larsen & Toubro (L&T) has been a steady outperformer through this bull-run. The Nifty has risen by 44 per cent in the past 12 months, by 19 per cent since January, and by 9 per cent in the past three months. In comparison, L&T has returned 65 per cent (12 months), 26.5 per cent (YTD), and 11 per cent (3 months), respectively.

Many traders would consider this an obvious momentum trade. But there are also fundamental reasons for believing that the stock could continue to outperform. The infrastructure focus in the Union Budget should benefit its engineering and construction (E&C) business.