New Delhi [India], March 26 : Larsen & Toubro (L&T) is likely to emerge as the winning bidder for a significant project from QatarEnergy LNG worth between USD 4 billion and USD 4.5 billion, according to the Axis Capital report, which cited a media report.
This contract is a part of QatarEnergy's broader plan to expand its liquefied natural gas (LNG) production capacity from 70 million tonnes per annum (MTPA) to 126 MTPA.
L&T has already disclosed approximately Rs 350 billion in core orders on exchanges for Q4FY25.
With the addition of the Qatar contract, the company is well-positioned to exceed Axis Capital's estimated Rs 600 billion core order inflow for the quarter, the report added.
The firm is also set to surpass its annual consolidated order inflow guidance of 10 per cent year-on-year (YoY) for FY25 and is likely to exceed Axis Capital's FY25 estimate of Rs 3.45 trillion, implying a 14 per cent growth.
The company reported a strong performance in Q3FY25, with a notable core order inflow beat and a 20 per cent growth in core revenue.
The outlook of L&T will depend on the number of complex projects awarded over the next 12-18 months, the Axis Capital said.
The report added that L&T's FY26 prospect pipeline will be a key indicator of its growth potential, with an expected 8 per cent-10 per cent increase.
Even in challenging years, the company's prospect-to-order conversion rate has ranged between 15 per cent and 25 per cent, the report added.
Despite flat railway and road capital expenditure (capex) allocations in the Union Budget, report does not see this as a material downside for L&T.
The company's central sector exposure accounts for approximately 13 per cent of its Rs 5.6 trillion order book, with 22 per cent of its India order book tied to central projects.
The Indian market represents about 58 per cent of L&T's total order book.
Furthermore, the company has minimal direct exposure to standard NHAI EPC/HAM projects and conventional railway expansion projects, the report added.
Additionally, working capital improvements have been evident, with the net working capital (NWC) to sales ratio improving by 390 basis points (bps) YoY to 12.7 per cent. The order book also witnessed a 20 per cent YoY rise.
For FY25, L&T has upgraded its consolidated revenue growth guidance to over 15 per cent, with the report estimating it at 16 per cent. Similarly, the company expects order inflows to surpass 10 per cent, while the report projects them to reach 14 per cent.
Core margins have tracked a 10 bps increase over the first nine months of the fiscal, with the FY25 guidance remaining steady. Based on report's estimates, L&T's FY27E core earnings per share (EPS) is projected at Rs 107, reflecting a 23 per cent compound annual growth rate (CAGR) from FY24 to FY27.
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