Larsen & Toubro (L&T), a prominent Indian multinational, has entered into a strategic partnership with Holtec International's Asia arm to bolster heat transfer solutions for the nuclear power industry. This collaboration marks a significant step towards advancing technological capabilities in the nuclear sector's heat management systems.

Key Highlights of the Partnership

• Memorandum of Understanding (MoU): L&T's Heavy Engineering business vertical has signed an MoU with Holtec International, a US-based nuclear energy solutions provider.
• Focus Area: The partnership aims to offer design and build solutions for Heat Transfer Equipment.
• Existing Collaboration: This MoU builds upon an existing partnership between L&T and Holtec for the global deployment of SMR-300 (Small Modular Reactor) designed by Holtec.
• US Department of Energy Support: The collaboration is supported by the prestigious 810 Authorization granted to L&T by the US Department of Energy.

Scope of Collaboration

The partnership between L&T and Holtec is set to combine:

• L&T's world-class nuclear manufacturing capabilities
• Holtec's pioneering design expertise

This synergy aims to deliver cutting-edge solutions for nuclear and thermal power plants worldwide, with a special focus on Heat Transfer Solutions for conventional power plant islands and balance of plant.

Strategic Importance

Mr. Anil Parab, Whole-time Director & Senior EVP – Heavy Engineering & CE & IPDD at L&T, highlighted the strategic significance of this partnership:

"Post the COVID pandemic, energy security emerged as a strategic need, with more than 32 countries having committed to triple their nuclear power generation capacity. Our partnership with Holtec is a key strategic move to fast-track efficient energy systems and shape a sustainable energy future for both India and the world."

Expected Outcomes

The collaboration is anticipated to:

1. Drive the development of reliable and resilient technology
2. Optimize thermal regulation in power plants
3. Maximize cycle efficiency
4. Ensure reliable operation of power plants
5. Contribute to global energy transition

This partnership between L&T and Holtec represents a significant step towards enhancing the efficiency and reliability of nuclear power generation, potentially playing a crucial role in addressing global energy needs and sustainability challenges.

Larsen & Toubro (L&T), India's leading engineering and construction conglomerate, has reported a strong performance for the second quarter of the fiscal year, marked by significant growth in order inflow and steady financial results.

Financial Highlights

L&T demonstrated resilience in its financial performance for the September quarter:

The company's order book saw a substantial boost, with the international segment contributing 49% to the total orders received.

Strategic Expansion and Outlook

L&T is strategically diversifying its portfolio:

• Expanding into green hydrogen, semiconductors, and defence sectors
• Maintaining its FY26 guidance for the core Engineering & Construction (E&C) business:
  • Over 10% order growth
  • 15% revenue growth
  • 8.5% margin target

Middle East Momentum

The surge in order inflow was primarily driven by strong demand from the Middle East, highlighting L&T's growing international presence and the region's increasing infrastructure investments.

IT Services Segment Performance

The company faced some headwinds in its IT services portfolio, which contributed to the 30 basis points decrease in operating margin. This compression in the IT services segment reflects the broader challenges faced by the tech industry.

Hyderabad Metro Divestment

L&T has reached an agreement with the Telangana government regarding its stake in the Hyderabad Metro project:

• The state government will take over ₹13,000.00 crore of debt
• L&T will receive ₹2,000.00 crore in equity

This deal is expected to help L&T optimize its balance sheet and focus on its core business areas.

Analyst Outlook

The market sentiment towards L&T remains positive:

• Multiple analysts have maintained 'Buy' ratings
• Target prices range from ₹4,400.00 to ₹4,766.00
• This represents a potential upside of 9-18% from the Friday closing price of ₹4,031.20

L&T's robust order book growth, strategic expansions, and strong financial performance continue to make it an attractive proposition for investors looking at the infrastructure and engineering sector in India.