Engineering and construction company Larsen & Toubro (L&T) has written off orders worth around Rs 16,000 crore in the last fiscal (2017-18), making it probably the highest ever it has done so far.
As of FY18, the company’s consolidated order book position stood at Rs 2,63,107 crore, thus cancelling 6% of its total order book.
R Shankar Raman, chief financial officer, L&T said, “Last year we had written off approximately Rs 10,000 crore worth orders, the year before was around Rs 14,000 crore.” So, in the last few years put together, L&T has written off close to Rs 40,000 crore worth of orders from its books.
The orders were written off in the infrastructure sector with a mix of road construction and other construction related businesses.
“It is on the real estate side, many of residential orders that we had taken. I think due to certain leveraging of balance sheets as well as the effects of cash being not available. I think we take a prudent call to not move out of these orders, as and when they revive we will see at that time. There’s no point in having them in book when its not moving,” said S N Subrahmanyan, chief executive officer and Managing Director while addressing the media during their Q4 results announcement.
The company evaluates its order book position twice a year and sees the ones that are progressing look and which are stagnant.
For the company, infrastructure segment continues to account for the biggest chunk in the overall order book.
In the current fiscal, the company has no plans to transfer assets to InvIT. However, there is a possibility of the company transferring road assets to InvIT in FY20, said R Shankar Raman.
INFRA BURDEN
- The orders were written off in the infrastructure sector other construction related businesses
- Infrastructure segment continues to account for the biggest chunk in the overall order book
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Larsen & Toubro")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}