L&T secures order for Amaala project in Saudi Arabia; stock hits new high

Larsen and Toubro (L&T) shares touched a fresh all-time high in intraday trade on Wednesday after its construction arm bagged a “major” order for the Amaala project in Saudi Arabia's Red Sea region. The conglomerate considers orders in the range of ₹5,000 to ₹10,000 crore as major orders. The consolidated order book of the company stood at ₹450,734 crore as of September 30, 2023, with international orders having a share of 35%.

Early today, L&T shares opened marginally higher at ₹3,492.30 against the previous closing price of ₹3,489.20 on the BSE. During the session, the share price of engineering and construction major rose 1.6% to touch a new life-time high of ₹3,548, while the market capitalisation rose to ₹4.95 lakh crore.

The stock scaled a new height amid sustained rally in the recent past, with the stock price zooming nearly 48% so far in December. L&T shares have risen 72.4% from its 52-week low of ₹2,058.10 touched on January 4, 2023.

In an exchange filing today, L&T says its construction arm has been chosen as the turnkey engineering, procurement and construction (EPC) contractor to establish various systems related to renewable energy generation and utilities, for the Amaala project in the Red Sea region, Saudi Arabia.

T. Madhava Das, Whole-Time Director & Sr. Executive Vice President (Utilities), Larsen & Toubro says, “The award of this prestigious contract stands testimony to the synergistic strength of diverse offerings of L&T Construction in providing innovative solutions to customers keen on sustainable, clean and reliable electricity and water systems.”

Amaala is an ultra-luxury destination set in the Prince Mohammed bin Salman Natural Reserve along Saudi Arabia’s northwestern coast. Spanning an area of 4155 square kilometers, the project features pristine landscape and diverse natural ecosystems, coupled with unique and intriguing heritage and local culture. Once completed, this destination will have 25 hotels and 900 luxury residential villas, apartments and estate homes alongside high-end retail establishments, fine dining, wellness and recreational facilities, as per the exchange filing.

The release further states the consortium of UAE's clean energy powerhouse, Masdar, and French electricity utility EDF has signed the concession agreement for the fully integrated utility project with the developers of Amaala. L&T has entered into an EPC agreement with the sponsors - EDF and Masdar.

The project awarded to L&T will have an optimised off-grid renewable energy system comprising of around 250 maximum power output of a solar photovoltaic (PV) plant and over 700 megawatt-hour (MWh) battery energy storage system.

“The scope for power systems also involves biofuel based internal combustion engines, three Gas Insulated Substations, high voltage transmission lines and medium voltage distribution networks. The scope for water systems involves constructing a 37 MLD Seawater Reverse Osmosis Plant, 6 MLD Sewage Treatment Plants, marine works including intake and outfall, tank farms, potable water network, wastewater network and treated sewage effluent network,” the release highlights.

L&T is a $23 billion multinational company, operating in over 50 countries worldwide. In Q2 FY24, the conglomerate reported a 45% year-on-year rise in net profit at ₹3,223 crore, while consolidated revenues grew 19% YoY to ₹51,024 crore, primarily aided by improved execution of the large order book and accelerated progress in the Projects and Manufacturing portfolio. International revenues during the September quarter of FY24 stood at ₹21,898 crore, constituting 43% of the total revenue.

During Q2 FY24, the company received orders worth ₹89,153 crore at the group level, registering a strong growth of 72% on a yearly basis. The orders were received across diverse segments like onshore verticals of the hydrocarbon business, urban transit systems, transmission & distribution as well as residential & commercial space. International orders at ₹59,687 crore during the quarter comprised 67% of the total order inflow.

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