L&T shares rise up to 4%, top index gainers amid market correction today; here's why

Shares of Larsen & Toubro (L&T) gained 4.12% to trade at ₹3,794.70 on Friday, moving close to the 52-week high of ₹3,963. The infra stock was the top gainer on Sensex and Nifty as the Telangana government confirmed plans to purchase L&T's stake in Phase-I of the Hyderabad Metro Rail project for ₹2,000 crore and take on more than ₹13,000 crore in project debt. Meanwhile, Nifty 50 index was set to close lower for a sixth straight session, highlighting L&T’s relative strength in a weak market.

According to a brokerage note by JM Financial, L&T's exit from the Hyderabad Metro project removes a long-term overhang on the stock and is expected to be modestly accretive to earnings per share. The brokerage stated, “Exits from such an asset will save L&T more than ₹600 crore on a Profit Before Tax / Profit After Tax level, and can also see an EPS uptick of 4%.”

JM Financial further expects that the company’s return on equity could improve by 60-70 basis points as a result of the transaction. Earlier, reports suggested L&T had sought ₹5,900 crore plus debt absorption, but the present agreement focuses on the company’s main requirements.

The anticipated exit is expected to improve key financial metrics for L&T, including an uplift in EPS and return on equity, and may provide the company with greater flexibility in future capital allocation.

The stock of the infra major has gained 2% this year and fallen 0.74% in the last one year. Total 2.22 lakh shares of the firm changed hands amounting to a turnover of Rs 82.98 crore on BSE. 

In terms of technicals, the relative strength index (RSI) of L&T stands at 54.3, signaling it's trading neither in the overbought zone nor in the oversold zone. L&T stock has a one-year beta of 1.2, indicating high volatility during the period. L&T shares are trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The stock hit a 52-week low of Rs 2967.75 on April 7, 2025 and rose to a 52 week high of Rs 3963 on December 10, 2024.