L&T Wins Significant Order from ONGC for Pipeline Replacement Project

Keywords: Larsen & Toubro, L&T, ONGC, Pipeline Replacement Project, offshore pipelines, engineering, procurement, construction, India’s west coast

Larsen & Toubro Ltd. (L&T), a prominent engineering and infrastructure conglomerate, has secured a substantial order from ONGC Ltd. for the eighth phase of the Pipeline Replacement Project off India’s west coast. The order, classified as “significant” by L&T, falls within the ₹1,000 crore to ₹2,500 crore range.

Project Details

The scope of the project includes:

• Engineering: Detailed engineering for subsea pipelines.
• Procurement: Sourcing of necessary materials and equipment.
• Construction: Building of 129-km subsea pipelines.
• Installation: Placement of pipelines in offshore fields.
• Commissioning: Testing and activation of installed infrastructure.

This initiative aims to enhance ONGC’s operational efficiency and reliability by replacing aging infrastructure with modern, high-performance pipelines.

Confidence and Expectations

According to Subramanian Sarma, Whole-time Director & President – Energy at L&T, this order underscores ONGC’s continued trust in L&T’s capabilities, particularly in executing complex offshore projects. L&T previously secured a “large” offshore order from ONGC for the Daman Upside Development Project in June.

Looking ahead to financial year 2025, L&T anticipates a 10% increase in order intake compared to the previous year, with a corresponding 15% growth in revenue. However, the company has set a margin guidance of 8.25%, slightly below analyst expectations ranging from 9% to 9.5%.

Market Reaction

Despite the positive development, shares of Larsen & Toubro are trading 0.9% lower on Monday at ₹3,517. The stock has shown flat performance thus far in 2024, reflecting mixed investor sentiment amid broader market conditions.

Conclusion

The latest contract win reinforces L&T’s leadership in executing large-scale infrastructure projects in India’s energy sector. As the company continues to expand its portfolio and operational footprint, attention will be on its ability to maintain profitability amidst competitive market dynamics.

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