Shares of Larsen & Toubro Ltd. snapped a three-day gaining streak, even as the nation’s largest construction and engineering company secured another “mega order” for the bullet train project.
The transportation infrastructure business of L&T Construction has secured another mega contract from the National High-Speed Rail Corp. to construct 87.569 km of the Mumbai-Ahmedabad High Speed Rail project, according to an exchange filing. L&T defines 'mega' orders as those d more than Rs 7,000 crore.
The scope of this 'C6 package' includes construction of viaducts, one station, major river bridges, maintenance depots and other auxiliary works. The order represents 17.2% of the total length, the company said.
"The bullet train project is the first sure sign of our economy kick-starting again and another opportunity to drive the Make In India and Atmanirbhar Bharat Abhiyan," SN Subrahmanyan, managing director and chief executive officer at L&T, was quoted as saying in the filing.
The company had earlier won a C4 package of the same project, termed as the biggest engineering, procurement, and construction contract awarded in India to date.
"Domestic order flow [for L&T] is 97% and augurs well for future margin outlook," Jefferies India analyst Lavina Quadros said in a note. "Order flow pipeline was up 15% at end of Q2, after being down 26% year-on-year at the end of Q1. This indicates a favourable outlook for Q4 as well," Jefferies said as it maintained a 'buy' rating on the stock with a price target of Rs 1,270 apiece.
Of the 41 analysts tracking L&T, 38 have a 'buy' rating, two suggest a 'hold' and one has a 'sell' recommendation. The Bloomberg consensus 12-month target price implies an upside of 3%.
Shares of L&T ended 1.2% lower at Rs 1,134.25, as investors booked profits at higher levels, in-line with the sell-off in the benchmark indices.
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