L&T’s stock climbs on a strong profitability outlook

Shares of Larsen & Toubro (L&T) advanced by 2%, reaching ₹3,739.80 on the BSE during intraday trading today, on November 29, 2024. This surge reflects investor optimism surrounding the company’s profitability outlook in the near to medium term, supported by robust order inflows and strong execution capabilities. 

For those looking to invest in stocks, L&T’s consistent performance in engineering and construction makes it a noteworthy candidate.

Strong order book highlights L&T's resilience

L&T has demonstrated exceptional stability with a consolidated order book of ₹5.1 trillion at the end of September 2024. This growth builds on previous figures of ₹4.76 trillion in FY24 and ₹4 trillion in FY23, showcasing a sustainable expansion trajectory.

Approximately 70% of its orders are secured under price variation clauses, effectively shielding the company from significant commodity risks. This order diversity across domestic and international markets underscores L&T’s appeal to individuals aiming to invest in stocks with reduced volatility.

Revenue growth outlook remains promising

According to India Ratings and Research (Ind-Ra), L&T's revenue is expected to grow annually by 8-10% over FY25 and FY26. This projection is anchored in strong order inflows from domestic infrastructure projects and international contracts in the hydrocarbon and renewable energy sectors. Such consistent growth potential makes L&T a compelling option for those planning to invest in stocks with long-term profitability in mind.

Future opportunities and growth drivers

L&T’s management is confident of achieving its guided order inflow growth for FY25E, bolstered by a domestic pipeline of ₹4.13 trillion and ongoing execution momentum. Internationally, sectors like power transmission and renewable energy are expected to drive overseas order inflows.

The company’s focus on improving execution timelines and leveraging its ₹8.1 trillion order pipeline aligns with its revenue guidance and positions it well for future success. For investors considering opportunities to invest in stocks, these growth drivers underscore L&T’s strategic advantage.

Invest safely

L&T's robust profitability outlook, bolstered by its expansive order book and consistent revenue growth, highlights its appeal in the stock market. With strong domestic and international order inflows and analysts' confidence in its performance, L&T continues to be a solid choice for those looking to invest in stocks with long-term potential.