Strategic Business Realignment
Larsen & Toubro Ltd. (L&T), a major player in infrastructure engineering, has announced the formation of a separate business vertical focused on renewable energy. This move, aimed at enhancing management visibility and improving resource integration, marks a significant shift within its power transmission and distribution operations.
Accelerating Renewable EPC Growth
The newly formed vertical is designed to increase autonomy, improve customer proximity, and strengthen leadership oversight, enabling L&T to capitalize on the fast-growing renewable engineering, procurement, and construction (EPC) sector. SN Subrahmanyan, chairman and managing director of L&T, emphasized that this restructuring would allow the company to excel in the renewable energy space, reflecting its commitment to aligning with global energy transition trends.
Financial and Market Outlook
L&T reported a robust order pipeline, with the infrastructure segment leading at Rs 6 lakh crore, followed by energy transition projects valued at Rs 2 lakh crore as of June. The move comes as both India and other countries intensify efforts to shift away from fossil fuels, with India targeting 500 GW of renewable energy capacity by 2030.
Stock Market Response
Following the announcement, L&T shares experienced a slight decline, down 0.6% initially, then settling at a 0.44% decrease at Rs 3,688.45 by midday. This performance occurred amidst a general advance in the NSE Nifty 50 index. Over the past year, L&T’s stock has seen a 36% increase, with a 7% rise year-to-date. The stock’s Relative Strength Index stood at 56, with the majority of analysts maintaining a ‘buy’ rating, indicating a potential 8% upside based on the average of 12-month price targets from Bloomberg data.
Source: bloombergquint.com
