L&T Shares Hit Fresh Record High After Securing 'Mega' Order From MMRDA
The company's construction arm won an order valued above Rs 7,000 crore, as per its exchange filing.
Shares of Larsen & Toubro Ltd. hit a fresh lifetime high on Friday after its construction arm won a "mega" order valued at more than Rs 7,000 crore.
The heavy civil infrastructure business vertical secured the order from its client, the Mumbai Metropolitan Region Development Authority, for the design and construction of an underground road tunnel project between Orange Gate at Eastern Free Way and Marine Drive Coastal Road in Mumbai.
The order has to be completed within 54 months. "This project is in line with our strategic goals," L&T said in an exchange filing.
UBS Research, in a Sept. 27 note, raised the one-year target price from Wednesday's closing price of Rs 2,965.05 to Rs 3,600 apiece, citing cyclical earnings momentum, improving capital allocation, and stakeholder focus, while maintaining a 'buy' rating.
It cited the strong infra cycle reflected by the best order-inflow growth for many quarters, execution rate and operating profit margin at the cycle trough, and management's focus on faster project closures, it said.
Earlier this week, the company closed its buyback, which was subscribed for a total of 22.55 crore shares as of Sept. 25, according to combined data from BSE and NSE.
Qualified institutional buyers subscribed for 14.47 crore shares in the company, followed by individual investors, who subscribed for 2.21 crore shares, and non-institutional investors with 0.15 crore shares, according to BSE data. The share buyback attracted the maximum price set by the company at Rs 3,200 apiece, which is a 10.23% premium to Monday’s closing price of Rs 2,902.95 apiece.
Shares of the company rose as much as 1.61% to hit an all-time high, before paring gains to trade 0.68% higher at 10:21 a.m. This compares to a 0.39% advance in the NSE Nifty 50.
The stock price hit the above Rs 3,000 apiece mark at Rs 3,058.35 per share. It has risen 45.56% on a year-to-date basis. Total traded volume so far in the day stood at 1.7 times its 30-day average. The relative strength index was at 77, implying that the stock may be overbought.
Of the 40 analysts tracking the company, 37 maintain a 'buy' rating, one recommends a 'hold,' and two suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 3.4%.