Larsen & Toubro Ltd, a key player in India’s defence industry, has clinched two major contracts from the Ministry of Defence, Government of India. These contracts, valued at a total of Rs 13,368.95 crore, underscore L&T’s technological prowess and contribution to bolstering India’s defence capabilities.
The Ministry of Defence has awarded L&T a significant contract for the supply of High Power Radars (HPR) to the Indian Air Force (IAF). The HPR, designed as a static sensor for long-range aerial surveillance, will enhance the IAF’s capabilities for monitoring special zones of interest and tracking adversaries with optimal accuracy. With advanced features and remote operation capabilities, the HPR will replace existing long-range radars of the IAF, significantly enhancing India’s indigenous radar manufacturing technology. The contract, valued at Rs 5,700.13 crore, is a testament to L&T’s expertise in the design, development, and manufacturing of advanced defence systems.
In addition to the HPR contract, L&T has also secured a contract for the supply of Close-In Weapon Systems (CIWS) to the IAF. The CIWS, designed to protect vital assets from low-flying aerial threats, will be deployed at various locations across India. Comprising Air Defence Guns, Tracking Radars, and a Search Radar linked to a Command & Control Shelter, the CIWS project will provide terminal Air Defence to select locations in the country. The contract, valued at Rs 7,668.82 crore, reflects L&T’s commitment to providing cutting-edge defence solutions and encouraging the active participation of Indian aerospace, defence, and associated industries, including MSMEs.
These contracts hold significant strategic importance for L&T, representing approximately 10% of its market capitalisation. Moreover, they are expected to generate direct and indirect employment for approximately 1,000 and 2,400 individuals per year, respectively, over the next five years. The projects will not only boost India’s defence capabilities but also stimulate the growth of the domestic defence industry, fostering innovation and self-reliance.
L&T, with a strong presence in EPC projects, hi-tech manufacturing, and services, operates in over 50 countries worldwide. Its customer-focused approach and commitment to quality have enabled it to sustain leadership positions in various sectors for over eight decades. With a manufacturing footprint extending across eight countries, L&T delivers comprehensive design-to-realisation solutions across multiple domains, including defence.
L&T’s successful bid for these defence contracts reaffirms its position as a leading player in India’s defence industry. By leveraging its technological capabilities and industry expertise, L&T is contributing to the nation’s security while driving innovation and growth in the domestic defence sector. As the projects progress, stakeholders can expect further value creation and advancements in India’s defence capabilities.
L&T’s stock has surged today, gaining over 5% to an intraday high of Rs 3,685.10. It closed at Rs 3,627 marking a 4.48% increase from the previous close. Over the past year, the stock has shown significant growth, rising by 71.49%. Today’s gain is the largest single-day increase since July 2022.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.
Published on: Mar 1, 2024, 6:18 PM IST
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