Engineering and construction major Larsen and Toubro (L&T) is betting on big orders from the defence segment in the second half of this fiscal to boost its order book and sustain growth momentum.
L&T’s MD and CEO S.N. Subrahmanyan told The Hindu , “In defence shipbuilding, after a long time, the government has come out with 9-10 requests for quotation (RFQs). If we are even lucky in getting one or two, our shipbuilding yard will be occupied. I am optimistic and it should happen in the next 3-4 months.”
In June, the Defence Ministry issued four shipbuilding requests for proposal (RFP) amounting to ₹15,000 crore for the acquisition of various ships and craft for the Navy and Coast Guard.
The government is considering a mega ₹60,000 crore ‘Make in India’ project named P75I for the construction of six conventional submarines with advanced abilities to stay underwater for extended periods. L&T is keen to participate in the project and has opposed the idea that submarine projects should be given to public sector shipbuilders on a nomination basis.
Mr. Subrahmanyan said, “Submarine is a strategic issue. The government is talking about Indian make of P74I; they [government] will have to decide the foreign partner first for the technology and then it will be made in India with local partners.”
‘Policy inaction’
According to L&T, the sector continues to be plagued with policy inaction on allowing the private sector to participate in defence manufacturing and fabrication.
With a ₹573-crore in orders during Q2, L&T’s order book in the defence arena stood at ₹10,603 crore as on September 30, 2019, with the international order book constituting 16% of the total.
“The execution of tracked artillery gun order continues to drive revenue growth and margins in the segment. The current policy continues to inhibit private sector participation,” said L&T Group CFO R. Shankar Raman.
