IL&T hits all-time high on strong order book of Rs 5.1 trillion and strong outlook
Shares of Larsen & Toubro (L&T) rose as high as Rs 3,948, continuing a five-day rally with a 2 percent gain in intraday trade on December 9, 2024. The stock outperformed the Nifty 50, which has been the top performer. dipped 0.31% to 24,602 during the session. IL&T advanced 6 percent for the week, outpacing the index’s 2.3 percent gain, and recorded a 13 percent gain in the 12 trading sessions since November 21.
Order income and market expansion are improving prospects
IL&T has been strengthening its position in the market through significant systematic entry. Its consolidated order book reached Rs 5.1 lakh crore at the end of September 2024, up from Rs 4.76 trillion in March. Notably, 40 percent of the order backlog is from international markets, demonstrating the company’s global reach. A large part of the orders include price differentials, to reduce the risk of the asset.
The company has also expanded into new sectors such as renewable energy and semiconductors. The recent order of Rs 15,000 crore for NTPC’s thermal power projects in Madhya Pradesh and Bihar underlines its leadership in mega infrastructure projects.
The direction is consistent with the growth trajectory
For FY25, L&T targets a 10 percent plus growth in revenue and a 15 percent increase in revenue. Earnings before interest, tax, depreciation, and amortization (EBITDA) is estimated at 8.25 to 8.5 percent, driven by a strong pipeline of releases and various activities.
Analysts foresee continued growth
Analysts expect L&T’s revenue and profit after tax to grow at a compound annual growth rate of 14.7 percent and 15.1 percent, respectively, over FY24-FY26. By focusing on improving rates of return and leveraging private equity in the domestic market, the company is well positioned for long-term growth.
L&T’s diversification into sectors of high potential, combined with its operational strength, supports its market outlook, with the stock growing strongly amid a broad market downtrend.
