Good days are back, L&T bags Rs 1247 crore order

Indian multinational conglomerate Larsen and Toubro Ltd (L&T) informed the stock exchanges on Tuesday that its construction arm has won orders worth Rs 1247 crores in the buildings and factories, and power transmission and distribution businesses.

Building and factories business has secured a prestigious turnkey order worth Rs 989 crores from a global information technology major for the construction of their world class IT Park in Bengaluru. The project is scheduled to be completed in 30 months. Power transmission and distribution business wing has bagged an order worth Rs 258 crores. Larsen & Toubro (Oman) LLC, a subsidiary of L&T Ltd, has bagged an order valued at OMR 16.026 million from Oman Electricity Transmission Company (OETC) for the construction of a new Grid Station at Dil Abdusalam (DAS), and Suwaiq on an Engineering, Construction and Procurement basis (EPC).

Reacting to the news, the stock was up nearly 2.5 per cent at Rs 1199. The stock has been an under performer as compared to the broader market for the past one year. Recently the stock of the company touched a 22-month low of Rs 1145. Share price has been reflective of the company's performance in relation to the execution of projects which has been slowing down, affecting the stock negatively.

Further, according to certain media reports, L&T is set to get a major share in a Rs 5000 crore deal to upgrade and refit Russian-origin Kilo class submarines. L&T has received new orders of Rs 9095 crores in Q3FY16. With this new order the total order book of L&T stands at Rs 2,56,889 crores. Brokerage house Credit Suisse has upgraded the L&T stock to outperform. The brokerage had upgraded the stock from 'neutral' citing sustainable expectations and potential for positive surprise and reasonable valuations. Credit Suisse has also revised its earnings target for FY16 and FY17.

On the financial front L&T's operating revenue increased by 8.07 per cent to Rs 92,004 crores in FY15 from Rs 85,128 crores in FY14. The EBITDA margin of the company increased from 17.54 per cent in FY14 to 18.08 per cent in FY15. The net profit stands at Rs 4765 crores in FY15, a decrease of 2.79 per cent compared to last year. The total debt stood at Rs 24,607 crores in FY15, an increase of 20.80 per cent compared to Rs 20370 crores in FY14. The debt burden stood at 52.70 per cent of total assets of company.