BackL&T engineering arm bags over ₹7K cr refinery project in Rajasthan
L&T said it secured the engineering, procurement, construction and commissioning contract from HPCL Rajasthan Refinery to set up a dual-feed cracker unit for Rajasthan Refinery Project in Barmer
PremiumL&T Hydrocarbon Engineering (LTHE), a wholly-owned subsidiary of Larsen and Toubro, announced that it has bagged an over to ₹7,000 crore project to set up dual feed cracker unit in Rajasthan. In its regularity filing on Monday, did not provide the exact value of the contract, but specified that it secured the mega project from HPCL Rajasthan Refinery Ltd (HRRL).
HRRL is a joint venture between Hindustan Petroleum Corporation (HPCL) and Government of Rajasthan.
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"L&T Hydrocarbon Engineering Limited (LTHE), a wholly-owned subsidiary of Larsen and Toubro, has won an order from HPCL Rajasthan Refinery Limited (HRRL), a joint venture between Hindustan Petroleum Corporation (HPCL) and Government of Rajasthan," L&T said in a regulatory filing.
L&T said the engineering, procurement, construction and commissioning contract is for setting up a dual feed cracker unit (DFCU) for Rajasthan Refinery Project at Barmer, Rajasthan. "The DFCU is the biggest EPCC contract awarded in the country to date in the refinery and petrochemical sector," the company added.
The DFCU is used to convert Refinery Naphtha and Offgases to produce polymer grade Ethylene and Propylene by the process of thermal cracking.
Shares of L&T were trading 1.24 per cent higher at ₹1,161.95 apiece on BSE.
The recovery in the L&T stock has gathered further steam after the company informed the exchanges that it has won multiple orders for its construction and mining business.
So far in the December quarter, shares of the company have rallied nearly 31%. The stock of the engineering and capital goods major is now only around 7% away from its pre-covid highs.
According to research house Jefferies India Pvt. Ltd, Q3FY21 order flow should see 36% year-on-year (y-o-y) growth based on the orders worth ₹39,500 crore announced so far. If this robust order recovery continues in Q4, Jefferies expects order flows to be flat on a y-o-y basis compared to its earlier assumption of a 20% decline.
“Domestic order flow is 98% and augurs well for future margin outlook. We believe sharp infra/capex recovery is not on the cards for a while, but L&T’s ability to gain share should help it grow engineering and construction profits by double digits in the medium term," it said in a report on 15 December. Improvement in order book bodes well for the company’s margin outlook, which was another source of concern for investors.
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