Shares of Larsen & Toubro (L&T) rose 3% to Rs 1,936.55 in intraday trade on the BSE on Friday after the engineering and construction company said it had won a large order for its water and wastewater treatment business. The company did not disclose the exact value of the order. According to L&T, the significant value of the project is between Rs 1,000 crore and Rs 2,500 crore.

The company said it had received multiple orders from the Gujarat government’s Narmada Water Resources, Water Supply and Kaposa Department to implement the pumping system and pipelines from Tapa Dam to Nerona Dam (North Ring Road) project. This is the single most important order for the company in Gujarat.

The scope of work involves the design, supply, construction and commissioning of pump rooms and piping, as well as related electrical and automation engineering. L&T said the turnkey project aims to increase water resources in the Kachchh district of Gujarat by filling existing reservoirs that will irrigate 36,392 hectares of land.

Including today’s orders, L&T has won five “significant” orders so far this month. L&T Heavy Engineering has secured a major order from a reputable customer in Singapore to supply reactors for renewable diesel production in the global market. The company has also secured repeat orders from the Odisha Government Department of Water Resources to execute Cluster XIX and Cluster XX large-scale irrigation projects.

L&T has also won an order from a leading automotive giant to build a state-of-the-art manufacturing facility in the Indian state of Haryana. Meanwhile, the company’s transmission and distribution business won an order to build a 765kV transmission line in Gujarat.

L&T has outperformed the market over the past month, falling 1%, while the S&P BSE Sensex lost 3.4%. It has risen 17% in the past three months, compared with a 9% rise in the benchmark index.

L&T is India’s largest engineering and construction (E&C) company interested in EPC projects, high-tech manufacturing and services. It operates primarily in the Infrastructure, Heavy Engineering, Defense Engineering, Power, Hydrocarbon and Services business segments. The infrastructure segment contributed about 45% of its consolidated revenue, followed by services at about 30%.

In the April-June quarter (Q2 FY23), L&T announced an EPC order inflow range of around Rs 7,500-1,750 crore for railways, hydrocarbons, power T&D, water treatment, heavy engineering (as of now, non- Services sector), construction and factory sectors showed steady order inflows during the quarter amid a challenging environment.
ICICI Securities expects execution to increase year over year. According to the brokerage, working capital and cash flow management will be key to monitoring.

L&T will focus over the next five years on an emerging portfolio of green EPC, electrolyser manufacturing, battery and battery manufacturing, data centres and platforms (Sufin and Edutech) and real estate. L&T is targeting a CAGR of 15% and 14% in revenue and order inflow, respectively, in FY21-26, with a combined ROE of 18%, named Lakshya 2026. The focus on monetising assets is expected to further strengthen the balance sheet and boost returns, ICICI Securities said.