L&T shares gain 2% on defence ministry deal to buy 3 cadet training ships

Shares of Larsen & Toubro (L&T) gained 2 percent on March 2 after the Cabinet gave approval to sign contract with the EPC major for acquisition of three cadet training ships.

At 9:28am, shares of the company were trading at Rs 2,135, up 1 percent, on the BSE.

Under the Buy Indian-IDDM (Indigenously Designed, Developed and Manufactured) category, the Union Cabinet has accorded approval to sign a contract with engineering and construction conglomerate L&T for the acquisition of three cadet training ships at an overall cost of Rs 3,108.09 crore, as per a news report.

The defence ministry, in a statement on Wednesday, said the delivery of the ships is scheduled to start from 2026, the report said. The ships will be indigenously designed, developed and constructed at L&T shipyard in Kattupalli, Chennai, it added.

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Broking house Jefferies has a ‘buy’ rating on the L&T shares with a target price of Rs 2,660. It said that the order flow outlook remains buoyant.

The foreign brokerage firm said that the Centre and PSUs are driving capital expenditure and states are expected to pick up from the March quarter.

L&T is an engineering, procurement and construction major with interest. The company primarily operates in infrastructure, heavy engineering, defence engineering, power, hydrocarbon, services business segments. Infrastructure segment contributes around 45 percent to consolidated revenue followed by services which forms about 30 percent.

Several analysts believe L&T remains the best play on India’s capex story and is a widely preferred capital goods pick.