Rs 4,75,800 crore order book: LIC-backed multibagger civil construction company incorporates a step-down wholly owned subsidiary in Uzbekistan

Life Insurance Corporation of India (LIC) owns an 11.19 per cent stake in the company.

On Thursday, the shares of Larsen and Toubro Ltd plunged 0.76 per cent to Rs 3,621.45 per share from its previous closing of Rs 3,649.10. The stock’s 52-week high is Rs 3,948.60 and its 52-week low is Rs 2,446.15.

Larsen & Toubro Limited's wholly owned subsidiary, Larsen & Toubro International FZE, has incorporated a new wholly owned subsidiary company named Larsen & Toubro CIS Foreign Enterprise Limited Liability Company (L&T CIS) in Uzbekistan on July 10, 2024. L&T CIS is a new entity and is yet to begin business operations. It is formed to undertake Engineering, Procurement & Construction (EPC) projects, encompassing a wide range of services including engineering, supplying materials, civil works, installation, testing, and commissioning. The acquisition is a wholly internal group restructuring and does not involve any cash consideration or share swap. Larsen & Toubro holds 100 per cent ownership of L&T CIS through its step-down subsidiary.

Earlier, Larsen & Toubro's Precision Engineering Systems will build parts for 2 out of 5 Fleet Support Ships (FSS) being designed and built by Hindustan Shipyard Limited for the Indian Navy. These 220-meter, 45,000-ton vessels will be the largest in the Indian Navy's fleet and will be built at L&T's new shipyard in Kattupalli for approximately Rs 2,500 crore.

Furthermore, Larsen & Toubro's renewable energy division secured significant contracts from a prominent Middle Eastern developer to construct two solar photovoltaic plants with a combined capacity of 3.5 gigawatts (GW). The projects will also include grid connections with pooling substations and overhead transmission lines, with construction expected to begin soon. This comes after L&T won a solar-cum-storage plant project in India last month. With these new mega-orders, L&T's renewable energy portfolio is on track to reach a total capacity of 22 GWp (gigawatt peak), encompassing both operational and under-construction solar and wind generation projects. The total value of the Middle Eastern contracts is estimated to be around Rs 15,000 crore.

About the Company

Larsen & Toubro (L&T) is a massive Indian conglomerate with its fingers in many pies. Their core business is engineering, procurement and construction (EPC) solutions across various sectors like infrastructure, power, hydrocarbon (oil & gas) and defence. They also manufacture custom-designed machinery for these industries and even have a real estate arm. L&T is a major player in IT services through subsidiaries like L&T Infotech and Mindtree and provides financial services like rural and housing finance through L&T Finance Holdings. They even handle development projects involving infrastructure, toll management and power generation.

The company has a market cap of Rs 4.98 lakh crore and has been maintaining a healthy dividend payout of 34.6 per cent. Life Insurance Corporation of India (LIC) owns an 11.19 per cent stake in the company. The company has a robust order book valued at Rs 4,75,800 crore as of March 31, 2024. The stock is up 48 per cent from its 52-week low and gave multibagger returns of 145 per cent in the last 3 years. Investors must keep this Large-Cap stock. 

Disclaimer: The article is for informational purposes only and not investment advice.

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