Shares of Larsen & Toubro hit a six-month high of Rs 1,951 intraday on Friday after rising 2% on the BSE, as the company’s strong order book of nearly Rs 4 trillion suggested good revenue visibility for the next few years.

The country’s largest engineering and construction (E&C) stock has been trading at its highest since February 2, 2022. It hit a record Rs 2,078 on January 18, 2022.

Over the past month, L&T has outperformed the market, gaining 9%, while the S&P BSE Sensex has risen 1.4%. Also, over the past three months, the stock has gained 19% compared to the benchmark’s 5.6% gain.

L&T operates primarily in the Infrastructure, Heavy Engineering, Defence Engineering, Power, Hydrocarbons and Services business units. As of June 30, 2022, the group’s consolidated orders reached a record 3.63 trillion rupees, of which international orders accounted for 28%.

In the April-June quarter (Q1FY23), L&T secured orders worth Rs 41,805 crore at the group level, up 57% from last year. Compared with Q1FY22, the domestic order environment in Q1FY23 also improved significantly.

For FY23, L&T retained its guidance of 12-15% growth in group order inflows, with revenue and margins in the project manufacturing portfolio expected to remain around 9.5%.

“At the macro level, domestic tendering and awarding activity has improved. Second, we expect public Capex, including centres, states and public sector units, to be better this year than the previous year. Hopefully, private Capex will also follow improvement in the second half of the year,” ICICI Securities said.

L&T said a solid business mix and improved working capital management. Its focus on cash generation/distribution and divestment of non-core assets will lead to better ROE.

After announcing the first year of its Lakshya 26 strategic plan, the company expects to continue its planned profitable growth trajectory, execute its large orders efficiently and on time, take many value-adding actions, maintain its leadership position and enhance shareholder value. On a first-quarter earnings call, management said on a sustainable basis.

Management said the company is diversifying into new businesses such as green energy, e-commerce and digital platforms while seeking exit options and/or limiting exposure to non-core businesses during the Lakshya 2026 strategic plan.