MUMBAI: Citing delays in awarding orders and execution, Larsen & Toubro (L&T), hinted that the ‘achhe din’ for infrastructure is still a long haul. While it did forecast a 12-14 per cent growth in order book, the going will be nonetheless tough, according to A M Naik, executive chairman of L&T.
As it is, the company has wiped away non-moving contracts worth Rs 18,000 crore, to maintain only an ‘executional’ order book that stands at an eye-popping Rs 2.61 lakh crore. He warned that the government will have to step in to revive the capex cycle to make up for the hesitancy in private investments.
“The government will have to spend, otherwise there will be no growth in the economy. GDP may also come down if private sector doesn’t invest and I don’t see private sector investment coming anytime soon enough. At least not this year,” he said.
As for L&T, with cash balances of Rs 10,000 crore, it has no plans to raise funds, though monetizing road assets is on the cards. During the current fiscal, the infrastructure major will pump Rs 1,500 crore capital, up from last year’s Rs 1,000 crore.
Meanwhile, during the March quarter, net profits rose 28.4 per cent to Rs 3,180 crore – slowest profit growth in last four quarters – despite a one-time impairment charge of Rs 281 crore, while revenue grew 12 per cent to Rs 36,828 crore. It expects revenue to 12 per cent this fiscal.
Higher provisioning for NPAs led to margins of the financial services segment declining to 10.1 percent from 18.4 percent and its revenue stood at Rs 8,545.