L&T unit bags ₹15,000 cr thermal power project from NTPC, boosting order book

Construction major L&T's business vertical L&T Energy CarbonLite Solutions has secured a ‘Limited Notice to Proceed’ from NTPC Ltd for setting up an ultra super-critical project comprising thermal power plants in Madhya Pradesh and Bihar. The orders pertain to the main plant packages of the 2x800 MW Stage-II thermal power plant at Gadarwara in Madhya Pradesh and the 3x800 MW Stage-II thermal power plant at Nabinagar in Bihar.

The scope of work involves the design, engineering, manufacturing, supply, erection and commissioning of boilers, turbines, electrostatic precipitators (ESP), and auxiliaries, along with the related mechanical, electrical, instrumentation and civil works.

Subramanian Sarma, full-time director & president (energy) – L&T, says the company securing the ultra super-critical project -- worth more than ₹15,000 crore -- highlights its expertise in delivering innovative solutions. Amid the development, shares of L&T are trading in the green at ₹3,610.70 on the BSE, 9% lower than its 52-week high of ₹3,948.60 touched on June 3, 2024.

L&T reported a good set of results for Q2 FY25 as weakness in domestic contracts was offset by superior execution in international orders. The company reported a revenue of ₹61,500 crore, up 21% YoY. The domestic revenue increased by just 1.6% YoY on a consolidated basis whereas international revenue was up 46%. In the infrastructure segment, domestic revenue declined by 7% YoY while international revenue was up by a massive 154% resulting in a strong beat. Margins came in at 10.3% and were largely in line with expectations by analysts. The net profit came in at ₹3,390 crore was up 5.4% YoY.

L&T orderbook:

L&T's order inflow in Q2 FY25 came in at ₹80,000 crore, down 10% YoY. International orders comprised 63% of the total order inflow. The closing order book stood at a record ₹5,10400 crore, up 13% YoY.

Brokerage Centrum has maintained an "ADD" rating and a target price of ₹3,845, which earlier was set at ₹3,745. "Given the strong prospects pipeline of ₹8.1 lakh crore, we expect the order book position to remain robust in FY25. Total international orders now constitute 40% of the total order book and Saudi Arabia constitutes roughly 1/3rd of the total order book, which poses geographic concentration risk in our opinion," Centrum says in its recent report.

L&T's management maintained its guidance of 15% revenue growth and 10% order inflow on the higher base of FY24. Margins in core E&C business are expected at 8.25% as the contribution from the international segment is expected to be higher.