L&T was beset by buying in early trades on Thursday after the company announced that it bagged a Rs 1,242-crore (Rs 12.42 billion) order from IOC to set up a PTA plant at the latter's refinery at Panipat.

By 9:59 IST, the scrip of the cement, engineering and construction conglomerate rose 1.07% to Rs 189.20. A total of 6,960 Larsen & Toubro shares were traded on BSE by that time.

L&T has won a huge contract worth Rs 1,242 crore (Rs 12.42 billion) to engineer, procure, construct and commission a purified terephthalic acid plant for Indian Oil Corporation. The plant is to be set up at IOC's refinery complex at Panipat in Haryana, as part of its integrated paraxylene -PTA project.

The plant is being designed for an annual capacity of 5,53,000 tonnes of PTA under technology licence from Dupont UK. Engineers India will be the client's project management consultant. The plant is contracted to be executed in a tight schedule with mechanical completion scheduled for May 2005, with additional two months for commissioning. It consists of two major units, namely crude terephthalic acid CTA and purified terephthalic acid. In addition, it will have material handling and storage facilities.

L&T, under its own engineering management, is planning to utilise the design and engineering services of Kvaerner E&C, UK, supported by Kvaerner Powergas, Mumbai.

As for L&T's performance, it is expected to do well in the current quarter following much headway made by its engineering and construction division in procuring orders. The E&C division accounts for 60% of the company's revenues. The cement division contributes 27%.

The company had earlier issued a guidance that the E&C segment's revenues would grow over 20% for the full year. Operating margins are also expected to improve in the final quarter of 2003-04. Barring unforeseen circumstances, the company is optimistic about its performance for 2002-03 on the whole.

The E&C segment has been vindicated by the substantial housing, road construction and infrastructure activities carried out in the country. Directly, this has also boosted cement demand, another major area of operations for the company.

The company had earlier announced that it had bagged orders worth $32.5 million (Rs 156 crore) from SPF-TKP OMIFPRO SNC, a joint venture of Snamprogetti, Italy and Technip Coflexip, France, for supply of equipment to Oman India Fertilizer Company (OMIFCO) in the Sultanate of Oman. L&T's heavy engineering division and engineering & construction division will jointly execute these orders.

The second largest cement maker in the country, L&T, registered an 18.75% rise in cement deliveries to 950,000 tonnes from 800,000 tonnes a year ago. The company's production increased from 930,000 tonnes to 1.02 million tonnes during the period.

L&T, meanwhile, is looking at disinvesting its cement business and has proposed a strategic partner for the de-merged entity. Grasim which has more than 15% stake in L&T, is proposing an open offer to acquire control over the proposed new cement company at a price of Rs 130 per share. Grasim has already submitted a proposal by which it would acquire control of the cement business to L&T. Meanwhile, last week, Sebi cleared Grasim of charges of violating the Takeover Code while acquiring L&T.

For the third quarter ended 31 December 2002, L&T registered a 48% rise in net profit to Rs 80.67 crore compared to Rs 54.51 crore in the corresponding period last year. Total income increased by 31% to Rs 2,371.72 crore (Rs 23.71 billion) from Rs 1,809.77 crore (Rs 18.09 billion) in DQ 2001.

BSE code: 500510