L&T order book position at Rs 14,000 cr

Engineering and construction major Larsen & Toubro (L&T) is sitting pretty on an order book position of Rs 14,000 crore and has a backlog (projects under execution) of another Rs 14,000 crore. The company, which has demerged its cement business, expects to double its revenues in the next four years and touch Rs 20,000 crore.

A Ramakrishna, deputy managing director, Larsen & Toubro told Business Standard that the company was expected to end the last financial year recording almost the same turnover that it had clocked the year before.

"Sales grew almost 25 per cent in the last fiscal and we expect to be where we were when the cement business was part of our overall business. We are now refocussing our energies on the engineering and construction division which contributes close to 70 per cent of the total business," Ramakrishna said.

Ramakrishna said that the company had a combined back log and order book position of about Rs 28,000 crore.

"Our ECC division, which is celebrating its 60th year, has a Rs 10,000 crore order book position and our engineering division would have an order book position of Rs 4000 crore. At the same time we have a back log of about Rs 14,000 crore," he said

"With defence coming into the private sector, we expect the heavy industry division to get a big boost," Ramakrishna said.

L&T, which has an industrial licence to manufacture the entire range of defence equipment, expects its defence equipment division to clock a turnover of more than Rs 900 crore by fiscal 2007 as compared to Rs 250 crore, at present.

L&T had in a recent request to the government urged that foreign players should be forced into tie-ups with local partners when they bid for defence projects.

The L&T move is being attributed to the fear that with the domestic defence industry just spreading its wings, they could be forced out by bigger foreign players. L & T has also insisted that a technology transfer clause be included if defence contracts are to be given to foreign players.

Ramakrishna said that the way the company was growing it was on target to be a Rs 20,000 crore company by 2007-08. "This target is eminently feasible. If we can keep up our last fiscal's performance then we should be comfortably there," he said.

On the China front, he said that company had recently won an order to export heavy equipment related to the oil and gas industry.

"We are not looking at China becoming a major destination for us to execute construction related contracts. We are looking at China becoming more of a market for divisions like our switch gear and heavy engineering division," Ramakrishna said.