Larsen & Toubro Shares Continue Gains: What's Driving The Rally

Shares of Larsen & Toubro jumped another 1% on Wednesday as the company announced winning contracts for several of its businesses.

What Happened: The company on Wednesday announced that its Water & Effluent Treatment and Buildings & Factories Businesses have secured contracts worth ₹1,000-₹2,500 crore.

The Water & Effluent Treatment Business of L&T Construction secured a repeat order from the Drinking Water & Sanitation Department, Government of Jharkhand. The company will execute a Raw Water Transport System on turnkey basis from the proposed intake at Neghra, Rajmahal in Sahibganj
district to Sundar Dam in Godda district.

The Building & Factories Business secured an order from a “reputed developer to construct residential towers in Bengaluru.” The company will design and build civil structures “including waterproofing, masonry, and plastering for 10 towers comprising two basements, ground, and varying configurations of 26, 31 & 32 floors,” the company said in a regulatory filing.

The announcement comes a day after the company announced that L&T Energy Hydrocarbon has secured contracts worth around ₹5,000-₹7,000 crore from an overseas client. The contracts involve “engineering, procurement, construction & installation of offshore structures, and upgradation of existing facilities.” The company however did not reveal the name of the overseas client or the actual worth of the contracts.

See Also: Adani Enterprises Shares Bounce Back As Company Issues Clarification On Mundra PVC Plant

Global analyst firm Citi has a ‘buy’ rating for the stock with a price target of ₹2,630. Morgan Stanley also has an overweight rating for the stock with a price target of ₹2,827.

Domestic brokerages are also bullish on the stock. HDFC Securities has a ‘buy’ rating for the stock with a price target of ₹2,433. ICICI Direct also assigned a ‘buy’ rating for the stock with a price target of ₹2,795 – over 25% upside from the stock’s last closing price of ₹2,208.35.

Price Action: L&T shares traded 0.98% higher at ₹2,230 as the markets opened on Wednesday.

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Posted In: CitigroupConstruction IndustryHDFC SecuritiesICICI DirectLarsen & TourboMorgan Stanley Capital International