Engineering and construction major Larsen & Toubro bagged orders worth Rs 49,666 crore this fiscal, Rs 5,421 crore in the first week of January alone, implying that economic recovery is visible.
The consolidated order book of Rs 2.44 lakh crore as of September 2015, is higher by 14 per cent, compared to the corresponding period, last year, and the company has since then got orders worth Rs 11,545 crore, including orders worth Rs 2,450 crore announced on Wednesday. About 28 per cent of the orders are from overseas.
The $15 billion conglomerate with interests in engineering, construction, and logistics expects a modest five to seven per cent growth in its order book for this fiscal, according to its chief financial officer R Shankar Raman, who believes lower commodity prices and weakening currency have been constraining growth prospects and it may take some time for healthy pickup in the business opportunity.
The guidance for this financial year order book was reduced to five-seven per cent, compared to the projected 15 per cent during start of the year, due to slowdown in the economic activity as the Indian clients continued to postpone capital spending while consumer demand remained weak. Analysts believe L&T continues to be the best play in the Indian capital goods, given its strong execution capabilities and relatively healthy balance sheet. “Given the opportunities in defence and railways segments, L&T is the best play on India’s infra development and economic growth. We expect L&T to continue bagging good orders in the next couple of months to close this fiscal with the projected seven per cent growth,” said a Mumbai-based analyst.
L&T on Wednesday said its Oman subsidiary has bagged orders worth $93 million to construct a regional airport in the Sultanate of Oman, making it the third airport project to be executed by the company in Oman. L&T Hydrocarbon Engineering, a fully-owned subsidiary of L&T, in consortium with McDermott, has bagged an offshore contract from ONGC, valued at Rs 2,450 crore for the development of its Vashishta and S1 deepwater fields situated off the east coast of India, said a company statement on Thursday.
Early this week, IRB Infra said it had bagged orders for construction, operation, and maintenance of Zojila Pass Tunnel, the longest tunnel to be built in south-east Asia in the state of Jammu and Kashmir, at a cost of Rs 10,050 crore. L&T shares on BSE closed down 2.7 per cent at Rs 1,206 in a weak Mumbai market on Thursday, valuing the company at Rs 1,12,332 crore.
Analysts believe L&T continues
to be the best
play in the Indian capital goods
