L&T finalises 'mega' orders for solar plants in Middle East; PL shares target price for stock

Larsen & Toubro Ltd (L&T) on Monday said its renewable arm finalised 'mega' orders with a leading developer in the Middle East to build two Gigawatt scale solar PV plants. In terms of valuations, L&T's project classification of a mega order is between Rs 10,000 crore and Rs 15,000 crore.

"The plants will have a cumulative capacity of 3.5 GW. The scope of the orders also includes grid interconnections encompassing pooling substations and overhead transmission lines. Detailed engineering and initial construction work are expected to commence shortly," it stated in an exchange filing.

Last month, L&T said it secured a solar-cum-storage plant order in India. Now, with the fresh mega orders from the Middle East, L&T's renewables portfolio is poised to reach 22 GWp (Gigawatt Peak) cumulative capacity, comprising solar and wind generation projects already commissioned and those in the making, it added.

Commenting on the mega orders, SN Subrahmanyan, Chairman & Managing Director – L&T, said, "The Middle East is far ahead in creating sustainable energy infrastructure and in providing a smart lifestyle. These orders are welcome additions to our green portfolio, as we build the company of the future with next-generation technologies."

Brokerage Prabhudas Lilladher (PL) has given a 'Buy' call for L&T shares. "We believe the renewables business of L&T will continue to gain traction amid the energy transition trends underscored by the order won last month for solar-cum-storage order in India followed by this mega order in the Middle East," it mentioned.

"The stock is currently trading at a PE of 27.3x/21.4x on the earnings of FY25/26E. We have a Buy rating with a target price of Rs 4,047," PL further said.

L&T's stock today settled 0.06 per cent up at Rs 3,630.60. At this price, the stock has climbed 3.07 per cent on a year-to-date (YTD) basis.

On technical setup, the counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-day and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 53.85. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 53.61 against a price-to-book (P/B) value of 7.74. Earnings per share (EPS) stood at 67.68 with a return on equity of 14.44.