Larsen & Toubro advances 4% on winning new order from Tata Steel

Shares of Larsen & Toubro (L&T) moved higher by 4 per cent to Rs 1,126 on the BSE on Wednesday after the company said it has secured order from Tata Steel to supply 46 units of Komatsu Mining Equipment for the latter's iron ore and coal mines. However, the company did not specify the value of the contracts.

"The construction and mining equipment business of the company has secured one of its biggest orders ever to supply 46 units of Komatsu Mining Equipment from Tata Steel," L&T said in a press release. READ HERE

The order comprises of 41 units of Komatsu HD785-7 (100 Ton Dump Truck), three units of Komatsu WA900-3E0 (9 Cum Wheel Loader) and two units of Komatsu D275A-5R (410HP Crawler Dozer). The scope includes supply of equipment and full maintenance contract for 60,000 hours of equipment operation, it said.

With today's gain, the stock of L&T has gained 25 per cent in the past one month as compared to a 10 per cent-rise in the S&P BSE Sensex.

Despite near-term challenges, analysts at HDFC Securities have reiterated 'BUY' rating on L&T given its strong order book (Rs 2.99 trillion, 3 times FY20 core EPC revenue), healthy balance sheet and robust services business.

That apart, the management expects domestic ordering activity to gain traction in the second half (October-March) of current financial year 2020-21 or 2HFY21, given the government's continuous focus on infrastructure and uptick in economic indicators and tax revenues. L&T has also received the letter of intent (LoI) for Package C4 of Mumbai-Ahmedabad high-speed rail with Rs 250 billion value.