- Shares of Larsen & Toubro fell over 7% amid escalating Middle East conflict
- L&T's international orders were Rs 66,848 crore in the December quarter
- Analyst sees current price as a good buying opportunity due to diversification
Shares of Larsen & Toubro (L&T) are once again under immense pressure on Wednesday, with the scrip falling as much as 7% as the conflict in the Middle East involving Israel, Iran and the United States continues to escalate.
The stock is currently trading at Rs 3,766, which accounts for a fall of more than 7% compared to the last closing price of Rs 4.066. In the last five sessions, shares of L&T have fallen as much as 12%, reflecting shaky investor confidence amid escalating tensions in the region.
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The Middle East, after all, is a strategically significant region for L&T, as it is involved in various projects and operations in nations like the UAE and Qatar.
In the December quarter alone, L&T recorded international orders of Rs 66,848 crore, contributing 49% to the total order inflow. Meanwhile, international revenues were Rs 38,775 crore, constituting 54% of total revenues.
Time To Buy L&T?
G Chokkalingam, Founder & MD, Equinomics Research, who does not personally hold the stock, has shared his fundamental view on L&T and whether or not it is a good buying opportunity.
The analyst believes current levels present an ideal buying opportunity for investors, thanks to the company's aggressive diversification.
"L&T is a good buy at the current price. The technology business still accounts for about one-third of total profits. It has also aggressively diversified or is diversifying into finance, real estate, semiconductors, ECMS, nuclear & new energy, etc. They can mitigate risk in the long term," he said.
Regarding the short-term headwinds linked to the Middle East situation, Chokkalingam believes the war won't last long and its closure could be a huge boost for L&T.
"The current war is most unlikely to continue for very long. Most major economies would be affected as West Asia is the backbone global oil supply. Allies of the US in West Asia and gulf are too rich, and the value of life is very high. All major participants in this war cannot afford to have a prolonged conflict like Ukraine. Hence, this steep fall in L&T is an opportunity in our view," he added.
Meanwhile, Kush Bohra, founder of kushbohra.com, has shared his technical view. He has maintained a more cautious tone on the counter.
"Larsen & Toubro's stock has hit a rough patch, dropping faster than it climbed earlier this year and breaking below its 200-day moving average toward a key support level of Rs 3,700.
"While the company's strong reputation makes it a tempting buy at these prices, the threat of escalating conflict in the Middle East could drive the price even lower. The most balanced move is to pick up a small amount now but hold back on any major investment until the geopolitical situation stabilises and the stock finds a steady floor," he concluded.
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