Larsen & Toubro is awaiting fresh impetus from the government, through “focused policy decisions and rigorous implementation,” which will enable the company to realise business prospects in its core sectors such as infrastructure, power, minerals and metals, defence, and oil and gas.
“The development agenda of the new government is expected to remove the bottlenecks presently stifling the growth in India and create an enabling business environment,” L&T said in a release highlighting its performance for the year ended March 31, 2014. The company secured fresh orders worth Rs. 94,108 crore during the year ended March 31, 2014, registering a y-o-y growth of 15 per cent on a large base despite a sluggish economic environment in 2013-14.
The international order inflow of Rs. 30,752 crore during the year grew more than three times on a y-o-y basis, constituting 33 per cent of the total order inflow. Major orders during year were procured by the infrastructure segment.
The order intake during the fourth quarter was steady at Rs. 26,737 crore. International order inflow of Rs. 11,389 crore during this period constituted 43 per cent of the total order inflow for the quarter.
The total order book at Rs. 1,62,952 crore as on March 31, 2014, grew 13 per cent on a y-o-y basis. Of this, international order book constituted 21 per cent.
On the international front, the Middle East region offered promising prospects in infrastructure and oil and gas sectors, the company said.
Specifically, the infrastructure segment recorded a consistently upward trend in the order intake throughout the year. The order inflow for the year ended March 31, 2014, stood at Rs. 76,396 crore, registering 37 per cent growth over the previous year. International orders constituted around 33 per cent of the total order inflow.
The power segment secured fresh orders of Rs. 3,277 crore for the year, a decline of 59 per cent over the previous year due to continued slowdown in the domestic power sector.
The metallurgical and material handling segment won new orders of Rs. 2,574 crore during the year, registering a decline of 50 per cent over the previous year. L&T attributed the lower order inflow in 2013-14 to “several unresolved sectoral issues adversely impacting expansion plans and new investment in the sector.”
The heavy engineering segment bagged fresh orders valued Rs. 3,323 crore during the year ended March 31, 2014, lower by 17 per cent compared to the previous year on account of deferral of anticipated orders. International orders constituted 32 per cent of the total order inflow in this segment.
Meanwhile, L&T as a group won several new orders recently.
L&T Special Steels and Heavy Forgings has entered into a technology transfer agreement with The Japan Steel Works Ltd, a world leader in the field of heavy steel forgings. The five-year agreement covers transfer of critical technology for steel melting and heavy forgings made from ingots weighing up to 200 mt, for hydrocarbon, thermal power, steel and cement sectors.
L&T also received two EPC orders valued at around $480 million for setting up dual fuel-fired gas based combined cycle power plants in Bangladesh.
One order of approximately $280 million came from Marubeni Corporation, Japan, for setting up a 360-MW Bheramara combined cycle power plant development project of North West Power Generation Company Ltd, a fully-owned enterprise of Bangladesh Power Development Board.
The second order of approximately $200 million, also from Bangladesh Power Development Board, is for setting up the 225-MW Sikalbaha combined cycle power plant near the port city of Chittagong.
L&T also won new orders worth Rs. 2,458 crore across various business segments in May 2014. This included Rs. 1,634 crore worth of orders in domestic and international markets in the power transmission and distribution business and Rs. 517 crore worth of orders in buildings and factories segment.
“Being well positioned to tap the emerging opportunities in its core businesses, the company looks forward to a period of renewed investment momentum and sustainable growth. Given its large order book, the company is optimistic to maintain its growth momentum in the medium term, as domestic and global economic environment improves,” L&T noted.