Larsen & Toubro Ltd (L&T), India’s engineering and infrastructure powerhouse, saw its shares drop by 1.58% on April 1, closing at ₹3,436.95. This decline came even after the company secured multiple large-scale orders in its Power Transmission and Distribution (PT&D) business. As per L&T’s internal classification, “large” orders range between ₹2,500 crore and ₹5,000 crore. These orders include projects across India, Saudi Arabia, the UAE, Qatar, and Oman, reflecting the company’s strong foothold in the global energy infrastructure segment.
New Project Wins: A Closer Look
L&T’s Power Transmission & Distribution division continues to command attention in the global infrastructure arena. The company secured a 765kV Gas Insulated Substation (GIS) project in western India. It also won an order to build a transmission line dedicated to power evacuation in the same region. These projects support India’s push towards reliable and efficient energy infrastructure, especially in high-demand zones.
Beyond domestic boundaries, L&T bagged key international projects as well. In Saudi Arabia, the company will construct two 380kV overhead lines that will stretch over 130 kilometers on the outskirts of Riyadh. These projects hold strategic importance for the Middle East’s grid expansion initiatives.
Additionally, the company secured GIS orders in the UAE and Qatar. In Oman, L&T received further extensions on ongoing projects. These wins showcase L&T’s engineering strength, execution capability, and its long-standing credibility across international markets. Demand for robust grid infrastructure remains strong, and L&T continues to capitalize on this opportunity through high-value, complex projects.
Market Performance: What’s Pulling the Stock Down?
Despite these substantial order wins, L&T’s stock failed to gain upward traction. The shares fell below several long-term moving averages, signaling persistent technical weakness. Specifically, the stock traded below its 5-day, 100-day, 150-day, and 200-day Simple Moving Averages (SMAs). However, it remained above the 10-day, 20-day, 30-day, and 50-day SMAs, offering some support for short-term traders.
The stock’s 14-day Relative Strength Index (RSI) stood at 59.81, indicating neither an overbought nor oversold condition. This neutral RSI signals balanced momentum, but investors appear unconvinced by recent developments, likely due to broader market pressures.
Year-to-date in 2025, L&T’s stock has dropped by 5.92%. This decline comes amid volatile global markets and increased risk aversion by institutional investors. Despite project wins and strong fundamentals, investor sentiment remains cautious.
Financial Snapshot: Valuation Metrics
L&T’s financial metrics present a mixed picture. The company trades at a price-to-earnings (P/E) ratio of 47.20, which runs higher than the industry average. This elevated valuation may have led investors to book profits, especially after the recent rally in capital goods and infrastructure stocks. L&T also trades at a price-to-book (P/B) ratio of 7.19, further reinforcing premium pricing.
The company’s earnings per share (EPS) currently stands at ₹73.01. Its return on equity (RoE) remains healthy at 15.22%, reflecting efficient capital deployment. However, a one-year beta of 1.4, as reported by Trendlyne, indicates high volatility. This makes L&T’s stock susceptible to market swings, even when the company performs operationally well.
Why the Stock Declined Despite Strong Orders
1. Broader Market Sentiment:
On April 1, the Sensex plunged by over 1,300 points. This steep fall affected overall investor sentiment, dragging many fundamentally strong stocks along with it, including L&T. In such market conditions, investors tend to exit positions to cut losses, regardless of company-specific developments.
2. Technical Resistance:
L&T’s stock has struggled to sustain at higher levels. Traders likely booked profits after recent gains, adding to the selling pressure. With technical indicators showing resistance around its short- and medium-term averages, the price decline reflects a technical correction rather than fundamental weakness.
3. High Valuation Concerns:
L&T trades at a premium compared to its industry peers. Investors often show hesitation when a stock appears overvalued relative to earnings. In this case, the high P/E ratio may have led to cautious moves, especially with rising interest rates and inflationary concerns affecting equity valuations globally.
Outlook: What Lies Ahead for L&T?
Despite the near-term stock decline, L&T’s fundamentals remain strong. The company’s robust order book spans multiple high-growth sectors including infrastructure, heavy engineering, hydrocarbon projects, and IT services. Its diversified business model continues to act as a hedge against volatility in any one segment.
Analysts expect L&T to benefit from increased infrastructure spending both in India and overseas. Government policies promoting clean energy, grid modernization, and digital infrastructure offer long-term growth opportunities for companies like L&T.
Additionally, the company’s ability to win complex international projects—like those in Saudi Arabia and the UAE—underscores its global competitiveness. These wins will not only enhance revenue visibility but also position L&T as a key player in the global energy transition narrative.
However, in the short term, market sentiment, global cues, and investor risk appetite will continue to influence the stock’s movement. Volatility may persist as macroeconomic uncertainties weigh on capital markets.
Conclusion
Larsen & Toubro’s recent order wins reaffirm the company’s strength in power transmission and infrastructure engineering. These projects will significantly contribute to revenue and reinforce its leadership in grid development and EPC services. Yet, broader market corrections and valuation pressures pulled down the stock on April 1.
Long-term investors with a focus on fundamentals may view this dip as an opportunity. L&T’s track record, combined with its execution capabilities and global reach, keeps it in a strong position to ride out market turbulence and deliver value over the years ahead.
In summary, while the stock faces temporary headwinds, the business continues to march forward on the back of solid fundamentals and strategic project wins.
