L&T share price jumps to 52-week high on Street buzz of a likely $4-billion deal win from Saudi Aramco
₹2,927.95 in morning trade on BSE on Friday. The stock opened at ₹2,885.05 against the previous close of ₹2,847.05 and rose 2.8 per cent to its one-year high. The market capitalisation of the stock rose over ₹4 lakh crore mark on the BSE.
The stock has been enjoying bullish sentiment this year, gaining over 36 per cent year-to-date (as of September 7 close). Equity benchmark Sensex has gained nearly 9 per cent this year so far. The recent traction in the stock can be attributed to the news reports that suggested India's largest capital goods company secured a multi-billion-dollar contract from Saudi Aramco.
According to a report by MEED (formerly Middle East Economic Digest), L&T is one of the three contractors selected by Saudi Aramco "for the five main engineering, procurement and construction (EPC) packages of the estimated $10bn second expansion phase of its Jafurah unconventional gas production project." L&T's total deal win, as per the report, is worth $3.9 billion. Larsen & Toubro Energy Hydrocarbon has bagged the first package of $2.9 billion for gas processing plant and main process units and the third package of $1 billion for gas compression units. L&T has not officially confirmed this report so far.
Following the report, brokerage firmICICI Securitiesupgraded the stock to a buy from an add, pegging the target price of ₹3,141, implying a 10 per cent upside potential. "We upgrade the stock to a buy on strong consecutive order inflow for two quarters (Q1, Q2FY24), which could likely result in beat-to-order inflow guidance for FY24, a significant buyback to reward shareholders and consequent improvement in RoE (return n equity)," said ICICI Securities. The brokerage firm expects L&T's margin to improve in Q4 and
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