L&T Construction Wins ‘Major’ Order For Solar Power Plant In Saudi Arabia
A worker cleans the surface of solar panels during production at a manufacturing facility. (Photographer: Patrick T. Fallon/Bloomberg)

L&T Construction Wins ‘Major’ Order For Solar Power Plant In Saudi Arabia

The renewables arm of Larsen & Toubro Ltd.’s power transmission & distribution business has secured a “major” EPC contract for Sudair solar power project in the Riyadh province of Saudi Arabia.

The project—received from a consortium of ACWA Power and Water and Electricity Holding Co., subsidiary of the Public Investments Fund of Saudi Arabia—has a 30.8 square kilometre land parcel available to install a total capacity of 1.5GW photovoltaic solar modules with associated single axial tracker and inverters, according to an exchange filing.

While L&T didn’t disclose the size of the order, the construction conglomerate defines ‘major’ order worth Rs 5,000-7,000 crore.

“With several GWs of solar EPC (engineering, procurement and construction) experience, L&T has emerged as a global technology player for solar plants. Securing this project is a major milestone in our clean and green energy path to fight the climate crisis that the world faces,” SN Subrahmanyan, chief executive officer and managing director at L&T, was quoted as saying in the filing.

In the three months ended December, the company had received fresh orders worth Rs 73,233 crore, the highest in any quarter, led by the high-speed bullet rail contract. In the April-December period, the company’s order book stood at Rs 1.24 lakh crore.

According to ICICI Direct Research, EPC order inflows announced by L&T during Q4 FY21 were in the range of Rs 7,500-17,500 crore, which indicated “reasonable order inflows” for the quarter amid a challenging environment. “We expect reasonable execution pick-up sequentially owing to higher work force mobilisation and supply chain normalisation,” the brokerage said in a note. It expects working capital and the company’s cash flow situation to be key monitorables.

Shares of Larsen & Toubro closed 0.98% lower on the NSE compared with a 0.26% drop in the Nifty 50. Of the 42 analysts tracking the company, 39 have a ‘buy’ rating, two suggest a ‘hold’ and one recommends a ‘sell’, according to Bloomberg data. The average of the 12-month consensus price target implies an upside of 18.4%.

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