Larsen & Toubro Ltd Sees Surge in Call Option Activity Ahead of March Expiry

Robust Call Option Activity Highlights Investor Optimism

The most active call option for Larsen & Toubro Ltd. is the 4300 strike price expiring on 30 March 2026. On 25 February 2026, a substantial 2,814 contracts were traded, generating a turnover of ₹527.96 lakhs. The open interest stands at 1,597 contracts, indicating sustained interest and potential accumulation at this strike level. This activity is particularly significant given the underlying stock price of ₹4,307.40, which is just ₹132.60 below the strike price, suggesting traders are betting on a near-term rally beyond this level.

Price Performance and Technical Indicators Support Bullish Outlook

Larsen & Toubro’s stock closed the day with a gain of 1.30%, outperforming the construction sector’s 0.39% rise and the broader Sensex’s 0.57% advance. The stock is trading within 3.17% of its 52-week high of ₹4,440, underscoring strong price momentum. Technical analysis reveals the stock is comfortably above its 20-day, 50-day, 100-day, and 200-day moving averages, although it remains slightly below the 5-day moving average, indicating short-term consolidation amid a longer-term uptrend.

Rising Delivery Volumes Signal Increased Investor Participation

Investor engagement has surged, with delivery volumes reaching 43.3 lakh shares on 24 February 2026, a remarkable 179.5% increase compared to the five-day average. This heightened participation reflects growing conviction in the stock’s prospects, supported by its large-cap status and market capitalisation of ₹5,85,804 crore. The stock’s liquidity is also robust, with a trade size capacity of ₹26.41 crore based on 2% of the five-day average traded value, facilitating sizeable transactions without significant price impact.

Mojo Score Upgrade Reflects Improving Fundamentals

MarketsMOJO has upgraded Larsen & Toubro Ltd.’s Mojo Grade from Hold to Buy as of 17 February 2026, reflecting an improved Mojo Score of 75.0. This upgrade is underpinned by the company’s strong market capitalisation grade of 1, indicating its large-cap stature and stable financial footing. The rating upgrade signals enhanced confidence in the company’s earnings growth, project execution capabilities, and sector outlook.

Sector Context and Comparative Performance

Within the construction sector, Larsen & Toubro remains a bellwether stock, often setting the tone for peers. Its recent outperformance relative to the sector’s 0.39% gain highlights its resilience amid fluctuating economic conditions. The company’s diversified order book and strategic investments in infrastructure projects position it favourably to capitalise on India’s ongoing urbanisation and industrial expansion initiatives.

Expiry Patterns and Strike Price Significance

The concentration of call option activity at the 4300 strike price for the 30 March 2026 expiry suggests that traders anticipate the stock to breach this level within the next month. The open interest of 1,597 contracts at this strike is a key indicator of potential price barriers or support zones. Should the stock close above this strike price at expiry, these call options would be in-the-money, potentially triggering further buying interest and price appreciation.

Investor Implications and Strategic Considerations

For investors, the surge in call option volumes combined with the stock’s technical strength and fundamental upgrade presents a compelling case for bullish positioning. However, the slight dip below the 5-day moving average suggests a cautious approach to timing entries. Monitoring open interest changes and delivery volumes in the coming weeks will be critical to gauge sustained momentum.

Outlook Amid Macroeconomic and Sectoral Trends

Looking ahead, Larsen & Toubro is well-positioned to benefit from India’s infrastructure push and government spending on construction projects. The company’s order book remains robust, and its execution track record supports steady revenue growth. While global economic uncertainties and commodity price fluctuations pose risks, the current bullish option positioning suggests that market participants are optimistic about the company’s near-term prospects.

Conclusion

The pronounced call option activity at the 4300 strike price for Larsen & Toubro Ltd., coupled with its recent Mojo Grade upgrade and strong price performance, underscores a positive market sentiment. Investors should consider this data alongside broader sector dynamics and technical signals to make well-informed decisions. The stock’s liquidity and rising delivery volumes further enhance its attractiveness for both institutional and retail participants seeking exposure to India’s construction sector growth story.

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