Larsen and Toubro bag big construction order from Saudi Arabia

Mumbai-based Indian multinational conglomerate, Larsen and Toubro received multiple large-scale power transmission and distribution projects during the third quarter of the current financial year, increasing the global footprint of the company.

According to the latest regulatory filings made by the company with Indian regulators, Larsen and Toubro received multiple construction orders in the range of 1000 to 2500 crore Indian rupees projecting the excellent financial performance of the company during the current financial year.

The business orders include a project to build transmission lines and substations in Saudi Arabia.

Reports suggest that the Power Transmission and Distribution subsidiary of Larsen and Toubro will undertake the engineering, design, procurement, and construction of more than 400KM of 380kV overhead transmission lines and a new 230kV gas-insulated substation with associated automation and protection systems.

The construction of the power distribution system is part of the National Renewable Energy Program of the government of Saudi Arabia which is aimed at attaining optimal generation mix as envisaged in its strategic vision for 2030. The new power transmission line which would be built by L&T will also ensure a reliable, efficient, and safe supply of electricity in Saudi Arabia which is vital for the oil rich economy.

The long-standing relationship of the company with governments in the Middle East region is one of the major reasons why Larsen and Toubro received construction orders from Saudi Arabia for their highly significant power transmission project.

Apart from the Middle East, the Power Transmission and Distribution business of L&T also have a significant presence in African and ASEAN countries.

Following confirmation of a business order from Saudi Arabia, the stock value of Larsen and Toubro on the Bombay Stock Exchange increased on Monday by nearly 2 percent to 2,020.55 rupees per share.

The heavy engineering unit of Larsen and Toubro had earlier received an order for the supply of reactors for renewable diesel production, from a highly prestigious company based in Singapore.

According to ICICI Securities, Larsen and Toubro will post a decent performance in the third quarter with the support of these international business orders. The brokerage firm also states that the adjusted standalone revenue of Larsen and Toubro will increase by 10.2 percent on a year-to-year basis during the third quarter of the current financial year. Profit after tax of the multinational conglomerate is also expected to grow 5.9 percent to Rs 1,859 crore.