Larsen & Toubro shares rise 3% after securing major steel project in Middle East & North Africa

Shares of Larsen & Toubro climbed 3% on Tuesday to Rs 3,387 on the BSE after the construction major informed the stock exchanges that it will build a major expansion project for a steel producer in the Middle East & North Africa (MENA) region.In a regulatory filing, L&T said its Minerals & Metals (M&M) business has secured a “major” contract—valued between Rs 5,000 crore and Rs 10,000 crore—to develop a Pellet Plant and a Direct Reduction of Iron (DRI) Plant for a leading steel manufacturer in MENA. The project aligns with global decarbonization efforts, with L&T overseeing engineering, supply, erection, and construction.

The company has a history of executing large-scale iron and steel manufacturing projects worldwide, and this latest order would require L&T’s capabilities in delivering complex design-build steel plants, the company said. L&T’s M&M vertical provides end-to-end solutions across mining, minerals processing, industrial products, and metallurgical plants.

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The stock’s rebound comes after a weak session on Monday when L&T fell over 4% in reaction to the Union Budget’s marginal increase in capital expenditure (capex) allocation. Investors were disappointed with the government’s decision to budget Rs 11.2 lakh crore for FY26 capex, only slightly above the Rs 11.1 lakh crore in FY25.
The reduced emphasis on capex-led growth led to declines in infrastructure stocks, including L&T, Siemens, and IRB Infra, which fell up to 7% amid brokerage downgrades.

Brokerage firm Motilal Oswal noted that with the pace of capex growth slowing from 30% in FY21-24 to just 10% for FY26, the industrial sector may struggle to sustain order inflows at previous levels. Analysts are now favoring capital goods companies with diversified revenue streams beyond government contracts.

L&T recently reported strong Q3 earnings, with net profit rising 14% year-on-year to Rs 3,359 crore, while revenue grew 17% to Rs 64,668 crore. However, cost pressures dragged EBITDA margins down by 70 basis points to 9.7%. Despite this, the company secured Rs 1,16,036 crore in orders during the quarter, a 53% jump from the previous year, signaling a potential turnaround from sluggish first-half performance.

Over the past six months, L&T shares have declined 7.3%, while the stock has fallen 1.7% in the last week.

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