Why is Sensex heavyweight L&T surging in India today?

Shares of Larsen and Toubro (L&T), a leading engineering conglomerate, continued their winning streak, climbing by as much as 5.5% in Wednesday's trading session, marking the fifth consecutive day of gains.

The surge came on the heels of a significant announcement by the company regarding its financial strategy. Larsen and Toubro (L&T) shares climbing by as much as 5.5%.

L&T gets approval for ₹7,500 Crore fund raise

L&T's upward trajectory gained momentum after the company disclosed to the exchanges that its board of directors had given the nod to a proposal to raise up to ₹7,500 crore through various financial instruments.

These include external commercial borrowings, term loans, and non-convertible debentures, among others.

This move is aimed at bolstering the company's financial position and supporting its growth initiatives in the coming quarters.

How did the markets react?

Following the announcement, L&T shares rallied, climbing by 0.7% to reach ₹3,696.75, after opening at ₹3,685 levels on the Bombay Stock Exchange (BSE).

The market capitalization surged to ₹5.06 lakh crore, with trading volumes witnessing robust activity, with 0.1 lakh shares changing hands within the first hour of trading.

How has L&T performed in Q3 of FY24?

In the third quarter of the fiscal year 2023-24, L&T reported a consolidated profit after tax (PAT) of ₹2,947 crore, reflecting a 15% increase compared to the corresponding quarter of the previous year.

The company's consolidated revenues also witnessed a robust growth of 19% year-on-year, reaching ₹55,128 crore, driven by the strong execution of its order book across projects and manufacturing portfolios.

Appointment of statutory auditors

L&T's board approved the appointment of MSKA & Associates as statutory auditors for a term of 5 years, effective from the conclusion of the 79th annual general meeting (AGM) till the conclusion of the 84th AGM of the company.

This decision follows the conclusion of the tenure of the company's current statutory auditors, Deloitte Haskins and Sells LLP, after the 80th AGM slated for the calendar year 2025.

Growing order book

During the quarter ended December 31, 2023, L&T secured orders worth ₹75,990 crore at the group level, representing a robust growth of 25% on an annual basis.

The company continues to witness strong demand across various sectors, underpinned by its expertise and track record in delivering complex projects.