L&T receives orders worth ₹1,000 to ₹2,500 crore for power business
On Monday, Larsen & Toubro (L&T) announced that it has received “significant” orders for its power transmission and distribution business in India and internationally totaling between ₹1000 crore and ₹2500 crore. On YTD basis the shares of Larsen & Toubro soared by 13.67% and in the last year the stock delivered stellar return of 54.64% and trade at a ₹2,375 per share on BSE.
The new order obtained by the company is for the construction of a 765kV transmission line. This line will allow for the easier evacuation of renewable energy from the Andhra Pradesh wind and solar energy hub that is being developed around Kurnool. The company won orders worth nearly Rs. 2,30,000 crores during FY23. Given the upcoming elections in March 2024, it has provided an order intake guidance of 10-12% for FY24. The management has highlighted a pipeline visibility of over Rs. 10 lakh crores as projects are likely to come through, with a ratio of roughly 65:35 between domestic and international orders. Of the assessed pipeline, Rs. 6.5 lakh crores worth of projects are expected from infrastructure, power transmission, transportation, metals & minerals, etc., and Rs.2.5 lakh crores worth of projects from the energy space, especially hydrocarbon.
The company said in its con-call,”In FY23, net working capital (NWC)/revenue improved to 16.1 vs 19.7% in FY22. Net working capital is expected to further improve as the share of Gulf Cooperation Council countries in the order book increases, which will ensure timely payments. The management has highlighted expectations of improved order prospects in hydrocarbon and refinery from the Middle East by FY24-25.”
In a regulatory filing, L&T said that the business has won two orders for the upgrade of electrical networks in large industrial facilities in the Middle East. The scope of these orders involves establishing gas insulated substations with associated high voltage cable systems. The power transformers and control & protection systems are the other crucial elements that will be installed as part of the works, it said.
“This achievement has been on account of a strong year-on-year (YoY) growth of 35% in retail book with best-in-class asset quality and a decisive 54% reduction in the wholesale book,” company managing director Dinanath Dubhashi was quoted saying in a statement.
L&T reported its fiscal fourth quarter profit at ₹3,986.78 crore earlier last month, up 11% from ₹3,620.69 crore in the corresponding quarter last year. The company reported operating revenue of ₹58,335.15 crore, up 10.4% from ₹52,850.67 crore in the fourth quarter of FY22. The
L&T is a $ 23 billion company that operates in more than 50 countries and is involved in EPC projects, high-tech manufacturing, and services
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Updated: 26 Jun 2023, 11:46 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.