Although L&T did not mention the exact value of the contract, according to its project classification, the value of a 'major' order ranges between Rs 5,000 crore and Rs 7,000 crore. The 'large' order ranges in the range of Rs 2,500 to Rs 5,000 crore, while 'significant' order ranges from Rs 1,000 to Rs 2,000 crore.
In the past two weeks, L&T has outperformed the market by gaining 19 per cent, as compared to 8 per cent rise in the benchmark S&P BSE Sensex. The stock has recovered 39 per cent from its 52-week low price of Rs 661 touched on March 25, 2020. It hit 52-week high of Rs 1,607 in May 2019.
L&T's power transmission & distribution business has bagged ‘major’ orders in India and abroad.
In Kuwait, order has been awarded to upgrade substations and related power facilities in KNPC's Mina Al Ahmadi oil refinery. The business has won a 400 kV Grid Station order in Oman, while in Egypt, an order to design, supply, construct & commission a 220 kV gas insulated substation.
Meanwhile, the Home Ministry, yesterday, released guidelines which allowed the construction of roads, irrigation projects, all kinds of industrial projects in rural areas outside municipal corporations and municipalities after April 20.
“L&T remains the best play on India’s capex story. We note that without the capex cycle, it may be difficult for economic growth to achieve/sustain higher levels. However, with delays in the capex cycle, the vendor base including subcontractors are facing serious challenges to survive and L&T may have to support them in the near term. Once the situation improves, we believe L&T would be able to improve its working capital cycle as it has done in the past,” analysts at Motilal Oswal Securities said in company update.