L&T surges 6% as co seen as big beneficiary of Budget 2021

L&T surges 6% as co seen as big beneficiary of Budget 2021

NEW DELHI: Shares of Larsen & Toubro (L&T) climbed 6 per cent on hopes the stock would be a major beneficiary of the government’s capex push.

Edelweiss said the best beneficiary of the Budget in the capital goods sector remains L&T, given that more than 50 per cent of its annual domestic inflow comes from water transportation, which has seen handsome allocation.

“Additionally, stress on project cash flows, clarity on funding, have been a cyclical challenge for L&T, which gets addressed to some extent directionally,” it said.

At 9.40 am, the stock was trading 5.73 per cent higher at Rs 1,532.55 on BSE.

IIFL Securities said FY22 Budget was refreshingly aggressive in taking aim at spending in the high multiplier areas of the economy: capex was up 25 per cent, with emphasis on road, infra and railways.

“Cyclicals will do well on the back of the Budget,” it said while expecting L&T to be among the beneficiaries of the Budget.

The Budget proposed an increase in total capital expenditure by 18 per cent YoY to Rs 9.36 lakh crore.

“With the government choosing to spend even at the cost of a significantly higher fiscal deficit at 9.5 per cent in FY21 and 6.8 per cent in FY22, a major overhang on the fund availability for the sector goes away. L&T, Cummins India, KNR and PNC are our top picks in the sector,” Emkay Global said.

Phillips Capital sees L&T as a key beneficiary.

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