L&T Group shares in demand; L&T hits record high, LTI soars 16%

Shares of Larsen & Toubro (L&T) group companies were on a roll on Tuesday with three listed companies — L&T, L&T Infotech and L&T Technology Services (LTTS) — hitting their respective record highs in intra-day trade. Their shares rallied up to 16 per cent today on the back of positive corporate developments.

Among individual stocks, L&T Infotech zoomed 16 per cent to Rs 6,876.90 on the BSE after the company reported the strongest sequential revenue growth, its best-ever, for the July-September quarter (Q2FY22), at 8.9 per cent in constant currency terms. The stock of the information technology (IT) consulting & software company surpassed its previous high of Rs 6,498.50, recorded on September 24, 2021.

On Monday , the company reported a net profit of Rs 552 crore for Q2FY22, up 21 per cent year-on-year (YoY) and 11 per cent sequentially. Strong demand led to revenue growth of 25.6 per cent YoY at Rs 3,767 crore, while the figure was up 8.8 per cent sequentially.

Growth was broad-based across verticals, service lines, geographies and client buckets. Broad-based industry growth was led by BFS and manufacturing. The company’s earnings before interest and tax (EBIT) margin expanded 350 basis points (bps) YoY and 270 bps quarter-on-quarter (QoQ) to 19.9 per cent during the quarter. Ebit margins expansions led by SG&A leverage, offshoring, and higher working days, partially offset by utilisation and higher costs.

The management said that this was the strongest sequential growth the company has witnessed, taking its annual revenue run rate to cross $2 billion. It expects demand to remain strong over the next three years. “Despite the absence of large new deal wins in recent quarters, L&T Infotech’s growth momentum is one of the strongest in its history, indicating the broad-based nature of the demand environment,” the company said.

Meanwhile, shares of L&T hit a record high of Rs 1,853.85, up nearly 4 per cent, on reports that the infrastructure firm, on Monday, emerged as the lowest bidder for the construction and maintenance of the first three buildings of the Common Central Secretariat under the Central Vista redevelopment project. The stock surpassed its previous high of Rs 1,817.95 touched on October 14, 2021.

According to the Central Public Works Department’s bid documents, Larsen & Toubro Limited quoted around Rs 3,141 crore, which is 3.47 per cent less than the estimated cost. The firm submitted a total bid amount of Rs 31,41,99,87,657, Business Standard reported. CLICK HERE FOR FULL REPORT

Overall, as on date for the quarter, L&T has announced EPC orders in the range of Rs 6,000 to Rs 15000 crore. Further, continued momentum to win large/mega complex orders/ projects to substantially improve L&T’s order intake for FY22E despite challenging environment. This will further strengthen its order book and enhance its revenue visibility in the medium term. We expect standalone revenue, EBITDA CAGR of 12.1 per cent, 12 per cent over FY21-23E, ICICI Securities said in a note.

Separately, shares of LTTS surged 13 per cent to Rs 5,469.20, surpassing its previous high of Rs 5,000 touched on September 24, 2021, ahead of its Q1FY22 results slated to be announced later today.

The other group companies Mindtree was up 4 per cent to Rs 4,908.60 in the intra-day trade, and was quoting close to its record high level of Rs 4,937.15 touched on October 14, 2021. L&T Finance Holdings was also up 1 per cent at Rs 93.60. In comparison, the S&P BSE Sensex was up 0.70 per cent at 62,198 points at 12:59 pm.