Why L&T Share Price is Rising

India's engineering sector is currently booming, driven by the government's push for infrastructure development and industrial advancement.

This sector's steady growth has boosted demand for large-scale projects across infrastructure, energy, and technology, making it an attractive area for investments.

As a result, major companies in the engineering sector are seeing an increase in investor attention and share prices.

In the engineering sector, it would be impossible not to talk about Larsen & Toubro (L&T). It stands out as a leader in this sector.

The company operates across industries, including construction, electrical and automation, hydrocarbon engineering, and more, positioning itself as a top choice for large-scale, high-impact projects.

With a reputation for delivering complex projects on time and with high quality, L&T has earned a strong market presence domestically and internationally.

L&T share price rallied 5% in a single day, drawing a surge of investor interest. The company is in the spotlight as it declared quarterly results on Wednesday.

Let's take a detailed look at the quarterly results of the company to understand why L&T share price is rising.

#1 Stellar Quarterly Results

L&T reported strong quarterly results for the September 2024 quarter, fueling a positive shift in its share price. Its net profit rose by 5% year-on-year (YoY), reaching Rs 3.4 billion (bn) compared to Rs 3.2 bn in the same quarter last year.

Net profit exceeded market expectations, which strengthened investor confidence and added momentum to L&T's stock.

Its consolidated revenue for the quarter reached Rs 61.6 bn, marking a 21% increase YoY. This revenue growth was driven by rapid progress in L&T's projects and manufacturing portfolio, which saw high demand across various sectors, supporting steady operational growth and contributing to overall earnings.

International revenue also saw a significant increase, totaling Rs 32.1 bn and making up 52% of L&T's total revenue. This international strength reflects the company's robust global order book and highlights its expansion efforts across borders, further bolstering revenue streams.

A key takeaway from the results was L&T management's decision to maintain its growth guidance for FY25, projecting a 10% order inflow growth, 15% revenue growth, and core margin target of 8.3%.

This solid guidance has signaled L&T's confidence in achieving its financial targets, boosting investor sentiment and driving the recent rise in its share price.

#2 Order Inflow

The order inflow in October demonstrates L&T's steady success in securing projects across various regions and sectors, reinforcing investor confidence in its growth trajectory.

Here's a snapshot of the major orders secured by L&T over the past month:

Date	Business Vertical	Order Details
30-Oct-24	Power Transmission & Distribution	New orders in the Middle East and Africa for high-voltage electricity grid expansion, including an Energy Management System in Kenya
25-Oct-24	Advanced Technologies (Nuclear)	Contract from ITER Organization for advanced tech deployment in France's nuclear fusion project; MoU signed for tech collaboration
17-Oct-24	Hydrocarbon Business (L-EPC)	Significant order from Rashtriya Chemicals & Fertilizers Limited for a 1,200 MTPD NPK fertilizer plant in Raigad, Maharashtra
16-Oct-24	Heavy Civil Infrastructure	Agra Metro Phase 1, Line-2 project, awarded by UPMRCL for a 15.09 km elevated viaduct and 14 stations, enhancing Agra’s urban mobility

The consistent order inflow, particularly from international markets and complex engineering projects, has strengthened L&T's revenue outlook.

The robust mix of projects highlights L&T's ability to secure diverse contracts, signalling a stable growth trajectory that has positively influenced its share price.

What Next?

L&T is poised for robust growth, backed by a record order book exceeding Rs 5 trillion. This impressive figure reflects the company's strengths in engineering, construction, manufacturing, and project management.

The strategic focus on transformative investments is notable. The emphasis on green energy, data centers, digital platforms, and semiconductor design not only enhances the digital and sustainability footprint but also strengthens the existing business portfolio.

Continued public capital expenditure (capex) and a noticeable recovery in private investments contribute positively to the overall economic outlook. The momentum in Middle East capex is expected to remain strong.

While order inflow saw a decline due to a high base last year, the company demonstrated strong execution and an excellent working capital position in the most recent quarter. Although core margins are still on the path to improvement, they remain above last year's levels.

The management has retained its growth guidance, signaling confidence in future performance. However, achieving these targets may present challenges. The company is expected to navigate these complexities while focusing on executing its strategic initiatives effectively.

How L&T Share Price has Performed Recently

In the past five days, L&T share price is up 6.9%. In the last month, it is down marginally.

In 2024, so far its share price is up 3.3% and it has rallied 24.3% in the last year.

The stock touched its 52-week high of Rs 3,948.6 on 3 June 2024 and a 52-week low of Rs 2,872 on 1 November 2023.

About L&T

Larsen & Toubro Ltd (L&T), is an Indian multinational conglomerate company, with business interests in engineering, construction, manufacturing, technology, information technology, and financial services, headquartered in Mumbai.

The company is counted among the world's top five construction companies. It was founded by Henning Holck-Larsen and Soren Kristian Toubro, who were two Danish engineers.

L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly.

To know more about the company, check out L&T fact sheet and quarterly results.

You can also compare L&T with its peers:

L&T vs HEC Infra Projects

L&T vs Generic Engineering

L&T vs Trans Financial

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Happy investing!

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