L&T eyes three infra projects worth Rs 3,000 cr in Sri Lanka

Expects action in three months on succession plan

Notwithstanding the slump in the economy, engineering and infrastructure major Larsen & Toubro (L&T) has decided to focus on infrastructure and core areas and also increase geographical reach in West Asia, Africa and a couple of other countries.

Chairman A M Naik, after addressing an annual general meeting on Wednesday, told reporters the firm was looking at two or three projects in the infrastructure sector in Sri Lanka. “These projects are worth Rs 3,000 crore. Resources are an issue everywhere. Once resources are tied up, some time in the fourth quarter, projects will materialise,” Naik said.

Naik said the company sees investment opportunities in infrastructure and core sectors. “We do not see order intake coming down… West Asian oil-related projects, especially in the hydro carbon sector, are being deferred and cancelled, but they are building the infrastructure that they have to build beyond the oil era. So, we have opportunities. We have expanded our geographical reach to Africa and a few other countries. Overall, when compared with our competitors, our situation would be fairly okay,” he noted.

Naik said the company has 17 road projects, of which six to seven are not very profitable. "There are no plans to sell those. But, we want to make them profitable. We have taken a conscious decision regardless of if we have money or not. Until we make sure all our existing projects become profitable, we will not invest,'' he added. He informed that it would take two more years. ''Mood may be conservative, but every three months, we review whether things have improved and we will bid for projects selectively.”

Naik also indicated that in three months there would be some action on the company's succession plan. ''Normally, when a non-executive chairman is there, the post of managing director and chief executive officer is a must. However, when there is a group executive chairman, the company may think of a different kind of structure... The board has not decided… it will in due course,'' he said.

Meanwhile, in his response to Prime Minister Narendra Modi's call to the private sector to invest and take more risk, Naik said: “My opinion is that you have to be very cautious at a time when majority of the private sector companies are under financial stress. However, the PM is possibly looking for entrepreneurial action…”