Larsen & Toubro (L&T) has made several announcements of new projects across various verticals, and new order inflows worth over Rs. 14,000 crore have helped drive up L&T's share price over the last week. Today, with analysts turning bullish on the stock, the company  breached a new 52 week high, its highest level since August 2015. Despite a muted Q3, L&T has been working towards reducing its working capital expenditure, as operating margins improved for the firm both QoQ and YoY.

The movement in L&T reflects the broader optimism around infrastructure and capital goods companies, particularly post budget. The BSE Capital Goods Index (which includes companies such as Larsen & Toubro, Bharat Heavy Electronics (BHEL), Kalpataru Power Transmission (KPTL) and ABB ) has outperformed the Sensex. The final quarter of the financial year is usually a boost to company balance sheets in the capital goods industry, as firms rush to clear projects in order to meet their annual targets.

The macroeco scenario also looks good for L&T and its peers. The recent reforms in subsidy delivery to farmers and the rural sector - fertilizer subsidies will also be delivered via Aadhaar from June this year - and focus on irrigation and agri works, should boost the Indian market overall, improving cash flows in the domestic market, and enable stalled construction and infrastructure projects to take off. Lower crude and gas prices should aid order inflow, as well as the efforts to reduce regulatory hurdles and improve clearances on the government side.