L&T stock gains 2% on winning ultra mega order; soars 12% so far in March

L&T had guided for 10% YoY growth in its order inflow for FY25E, which has been comfortably surpassed with the recent order win

Shares of Larsen & Toubro (L&T) gained 2 per cent to ₹3,528 on the BSE in Thursday’s intraday trade after the company won an ultra mega order worth more than ₹15,000 crore from QatarEnergy LNG in its Hydrocarbon vertical in the overseas market.

 

Thus far in the month of March 2025, L&T has outperformed the market by surging 12 per cent after the company has bagged total contracts worth of ₹32,500 crore during the month. The engineering conglomerate has won three large contracts, one significant order and one ultra mega order.

 

However, the company did not specify the exact value of the contracts but as per L&T specification, an ultra mega contract is more than ₹15,000 crore. A large contract is in the range of ₹2,500 crore to ₹5,000 crore, and a significant contract ranges between ₹1,000 crore and ₹2,500 crore.

 

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In its press note, L&T, on Wednesday, said QatarEnergy LNG has awarded the engineering entity an ultra-mega offshore contract for the North Field Production Sustainability Offshore Compression Project (NFPS COMP 4).

 

The scope of work encompasses the engineering, procurement, fabrication, installation, and commissioning of two offshore compression complexes, each comprising of large offshore platforms with compression & power generation facilities, living quarters, flare platforms, interconnected bridges, and other associated structures to be located at approximately 80 kms off the northeast coast of Qatar.

 

With this order win, L&T’s January to March 2025 quarter (Q4FY25) order inflow announcements stand strong at ₹ 66,400 crore. L&T had guided for 10 per cent year-on-year (YoY) growth in its order inflow for FY25E, which has been comfortably surpassed with this order win. L&T’s order backlog stood at ₹5.64 trillion (3.1x TTM P&M revenue) as of December 2024, according to analysts at JM Financial Institutional Securities.

 

The order win speaks about L&T's distinct ability and global competitiveness to successfully deliver large, technically complex solutions for its customers. This order being the single largest order in the Offshore Hydrocarbon business, will help L&T achieve targeted order inflow for FY25, ICICI Securities said in a note.

 

Meanwhile, as of December, L&T’s outstanding order book stood at ₹5.64 trillion, its highest ever. For the quarter ended December 2024, L&T secured new orders worth ₹1.16 trillion, also an all-time quarterly high. About 60 per cent of the orders L&T won in the first nine months of the current financial year (2024-25/FY25) were from the international market, where West Asia dominates.

 

Order inflows for L&T have exceeded street estimates in the past four quarters despite the bearish outlook on the stock. Analysts at BNP Paribas believe the recent narrative of L&T’s order inflows shrinking in FY26 (due to a possible drop in crude oil prices) is misplaced. The brokerage firm said its deep dive into the Middle East prospects highlights that tendering could remain robust in CY25-26, coupled with a further fall in net working capital (NWC) levels.

 

The GCC prospect pipeline stands at USD2.7 trillion (2-3 years) with emphasis on gas and chemicals projects by Saudi Aramco, Qatar and the UAE as part of economic diversification plans. Saudi Electric Company’s (SEC) robust solar and T&D pipeline provides further opportunities. Large-scale water prospects are also emerging. The potential opening of Saudi realty for non-GCC nationals could also boost construction prospects and cushion the impact of Chinese competition, BNP Paribas said in the company update.