L&T dampener: Quick domestic demand revival unlikely
Economy

L&T dampener: Quick revival of domestic demand unlikely

Views: 503

Larsen-Toubro

Splashing cold waters on the hopes of an early recovery in domestic demand, India’s one of biggest conglomerates—Larsen & Toubro Ltd (L&T)—has said that its growth is still being pushed by international orders.

L&T, which has diverse activities from transport, infrastructure and military equipment to financial services, said international orders doubled in the three months to the end of June from a year ago and now constituted 44 percent of new orders.

Across the business, orders rose a more modest 11 percent, helped by major infrastructure, hydrocarbon and heavy engineering orders. “Conditions in the domestic market are still sluggish,” said a senior financial officer a few days back after L&T posted a 10 percent rise in first-quarter revenue.

L&T has been expanding overseas to offset weak demand at home amid a sharp economic downturn. “We are waiting for the domestic industry to pick up, growth to pick up.”

Profit after tax came in at 9.67 billion rupees, more than double last year. This was aided by the sale of Dhamra port, which netted it 13.5 billion rupees and rescued the firm from posting a loss.

Other project sales during the quarter included stake sales in L&T Finance Holdings Ltd and City Union Bank Ltd.

Executive Chairman A M Naik said in May he saw an improvement in the business outlook after the election of a new government raised the possibility of the authorities approving a backlog of projects that has hit infrastructure.

But the prospect of a revival in domestic demand is yet to filter through to a big rise in new orders, nor encourage infrastructure companies such as L&T to commit to new capital expenditure – central to any sustained economic recovery – because of spare production capacity.

Raman said he expected L&T to meet its guidance of 15 percent revenue growth and a 20 percent rise in order inflow in 2015. He retained his medium-term outlook for a gradual recovery in India’s economy.

Get a chance to meet who's who of Smart Cities ecosystem in India including key policymakers from Central and State Governments. Join us at Smart Livable & Resilient City Conclave, Pune on 29-30 June, 2018 to explore business opportunities. Like and connect with us on Facebook, Linkedin and Twitter.

Recommended from all portals

Click to comment

Leave a Reply

Your email address will not be published.

The Latest

.

About Us

Smart city portal was started with an aim to provide latest news information about the smart city mission of the Government of India. Founded in 2015, the portal enjoys the distinction of being India's first integrated website on smart cities of India. The website features stories on the economic growth of Indian cities where the government is trying to improve the quality of life of people by enabling local development and harnessing technology as a means to create smart outcomes for citizens.

Contact Us

Elets Technomedia Pvt. Ltd. Stellar IT Park, 7A/7B, 5th floor, Annexe Building, C-25, Sector 62 Noida – 201309, Uttar Pradesh, India

To Top