Larsen & Toubro's construction business has won its first EPC Railway Systems order in the All South Eastern Asian Nations (ASEAN) region. It will be constructing the Jakarta Mass Rapid Transit (MRT) Project Phase 2A through its long-term Japanese partner Sojitz Corporation, it said in an exchange filing.
The Jakarta MRT Phase 2A is an extension of the existing Jakarta MRT line for the section between Bundaran HI up to and including Kota with a total length of 12.5 kilometers and will have seven underground stations.
L&T has classified this order as "significant," which means the order value ranges between ₹1,000 crore to ₹2,500 crore.
The package involves procurement and delivery of multiple systems across various domains on a design and build basis including overall system integration.
L&T expects to strengthen its foothold in the ASEAN region through this order and enable it to secure more orders in this region. It is citing several railway projects which are envisaged to be developed in the ASEAN region over the next decade, as one of the key factors behind this belief.
Last week, L&T had bagged another "significant" order to construct five residential towers in Thane.
Reports also indicated last week that L&T and Kalpataru Power have emerged as the lowest bidders for Saudi Aramco's Master Gas System project.
Brokerage firm CLSA has maintained its "buy" recommendation on L&T with a price target of ₹4,360.
CLSA is expecting L&T to beat its own and the brokerage's order inflow estimates led by large Indian orders.
"While market is worried of Middle East (ME) orders post-Aramco’s advisory, L&T’s core right to win is its diversified portfolio & market, driving its sector-leading growth & is a reason for its premium valuation," the brokerage wrote in its note.
Shares of Larsen & Toubro are currently trading 2.5% higher at ₹3,471.50. The stock has risen 65% over the last 12 months.
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