L&T orders signal return of private capex in Sep quarter

L&T’s numbers paint a promising picture, but at least one cautioned against drawing quick conclusions.

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“We saw good project finalization during the quarter in the buildings and factory, and metals and mining spaces,” said Amit Anwani, vice-president and lead analyst for capital goods, industrials and defence sectors at Prabhudas Lilladher. However, he said that there was one large order win from the Adani Group for thermal power plants, which he estimates to be worth around ₹20,000 crore. Excluding this, private sector order inflow was normal.

L&T said that it was in advanced discussions with the Telangana government to divest its stake in Hyderabad Metro, a project that it developed and now operates. The exit will lead to a leaner balance sheet for L&T and improve its return on equity, Anwani said. But the company may take a significant hit on its investments.