L&T has been on a winning streak when it comes to orders in Q3 with the construction arm has secured significant contracts in its heavy civil infrastructure, power transmission and distribution business. The construction arm has secured a Regional Rapid Transit System (RRTS) Infrastructure order from the National Capital Region Transport Corporation (NCRTC) in Uttar Pradesh to execute a new, dedicated, high speed, high capacity rail project in the Delhi-Ghaziabad-Meerut Corridor.
The company also secured another mega-contract from the National High-Speed Rail Corporation Limited (NHSRCL) to construct 87.569 km of the Mumbai-Ahmedabad High Speed Rail (MAHSR) project, popularly referred as the Bullet Train project and classified the contracts upwards of ₹7,000 crore in the mega category.
Separately, its transmission distribution business has won a slew of orders in the international market from Nepal and Saudi Arabia. The company also bagged an order from the Punjab Water Supply & Sewerage Board, Gujarat Water Infrastructure and repeat order from Bangalore Water Supply and Sewerage Board.
In Nepal, the business has won an order to design, supply and commission a crucial 220kv Gas Insulated Substation along with associated works in connected substations, while in Saudi Arabia, the business has received orders to establish certain transmission links in the existing 132kV network. The company’s estimated order value in Q3 FY21 is at so far around Rs 42,300 crore which is a significant improvement from order inflows of Rs 28,039 crore in Q2 FY21 and Rs 23,574 crore in Q1 FY21.
Analysts say there is scope for earnings to grow and valuations to improve and the company is well-placed to emerge stronger given its financial, technical and managerial capability. They believe ordering and particularly execution can catch up in 2H FY21 and revise FY21E order inflow up to Rs 1.27 lakh crore from Rs 1.05 lakh crore. Analysts also believe that the scope for earnings to grow and valuations to improve is strong for L&T. The stock has risen 75 per cent from its 52-week low and is up nearly 30 per cent in the last one month.
