Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Yemen, Maldives and Libya have cut ties and imposed certain restrictions on Qatar from June 5.
Strained relations between Qatar and other Gulf nations is hurting Larsen & Toubro (L&T).
The Indian engineering company sees revenues from Qatar being delayed by a quarter and project implementation hit as the country doesn't want L&T to procure from other Gulf nations which have snapped ties with it.
"They do not want us to buy anything from say UAE or Saudi Arabia, but they accept alternative source, and if that costs more they are willing to pay more. If that means a delay in supply from other sources, we will get extension (to complete the project). So we are not in a bad position," said A M Naik, executive chairman, said.
Saudi Arabia, United Arab Emirates, Bahrain, Egypt, Yemen, Maldives and Libya have cut ties and imposed certain restrictions on Qatar from June 5.
Also, to expand its international presence, L&T is also looking at business prospects in North Africa, East Africa and some countries in the east like Myanmar, Malaysia and Vietnam.
Naik said the company is doing around Rs 8,000-9,000 crore projects in Qatar, all of which are doing well except the ones which involve certain countries with which they don't have good relations.
Asked if there is any impact on the company's projects in the Middle East due to the diplomatic crisis in Qatar, Naik said, "No, not because of that (diplomatic crisis), but oil and gas prices have come down. Generally, the development in the Middle East is somewhat subdued."
"The company has an established presence in GCC (Gulf Cooperation Council) countries, predominantly in the infrastructure and hydrocarbon sectors. While capex spends in the Middle East have generally contracted, some areas in hydrocarbon and core infrastructure are still witnessing investments, and these provide a favourable opportunity basket for the company's growth in the region," reads Naik's note.
With an aim to diversify and look for international business opportunities, apart from the GCC region, it is looking at selective prospects in North Africa, East Africa and some countries in the East including Myanmar, Malaysia and Vietnam.
The total unexecuted order-book from international markets stood at Rs 69,757 crore, which translates into 27% of the order-book.
In the infrastructure business, the company expects investment to rise in 2018 along with the rise in oil prices, but overall spending levels will remain far below the historic highs of 2012 and 2013.
Whereas in the transportation infrastructure sector, "Increased infrastructure investment, particularly in the UAE, Qatar, Kuwait, should further support the recovery in non-oil activity this year. Both UAE and Qatar have firm deadlines by which they need to deliver world-class events that require substantial new infrastructure," he said.
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