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Among the leading gainers on the Nifty 50, the shares closed nearly 2% higher at ₹2,901.60 on Friday.
The order win from Saudi Aramco is reportedly for the second expansion phase of its Jafurah unconventional gas production project, and will be executed by L&T Energy Hydrocarbon. This division accounted for about a fifth of the company’s total order book of over ₹4 lakh crore as of the June quarter.
“The biggest opportunity for L&T in rest of FY24 is Middle East (ME) hydrocarbon, which should address market concerns of much expected slowdown in government orders in 4QFY24 ahead of elections,” CLSA Asia Pacific Markets said in a note.
“By the time orders are placed and EPS gets visible, we expect the stock to re-rate,” it said, raising the target price for the share by over 5% to ₹3,240.L&T has announced order wins worth ₹15,000 crore so far in the current quarter; this comes on top of orders worth ₹66,000 crore in the June quarter. “Including the above mentioned orders, we expect order inflow for Q2 to be in a similar range,” said ICICI Securities, which expects the total order inflow for the company to be ₹2.2 lakh crore this year.
The brokerage has upgraded the rating for the shares to ‘buy’ from ‘add’ earlier, raising target price by more than 14% to ₹3,141. Shares of L&T are up nearly 40% so far in 2023, also supported by the company’s first ever share buyback. The conglomerate will buy back shares at ₹3,000 a piece via the tender route.
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