Larsen & Toubro Ltd (L&T), the Rs 17,578 crore Mumbai-based engineering giant, is eyeing a bounty in foreign shores.
MUMBAI: Larsen & Toubro Ltd (L&T), the Rs 17,578 crore Mumbai-based engineering giant, is eyeing a bounty in foreign shores.
It has set up subsidiaries in Oman, Saudi Arabia, Qatar and Kuwait, mainly to capture a slice of the mega construction boom in West Asia. It is in the process of building up its brand in Middle East in infrastructure, construction, hydrocarbon and power sectors.
L&T is also looking at doubling business from China to $200 million in next 2-3 years. The company is looking to generate 25% of its revenue from the export market, which would aid in the company’s efforts to mitigate geographic diversification risk.
R N Mukhija, president (operations) & member of the board, L&T told DNA Money: “We expect to double business from China to $200 million in next 2-3 years. Moreover, thrust on international business over the last few years has seen overseas earnings growing to 18% of the total revenues.”
L&T’s standalone business operations have gathered significant traction over the past few years, with revenue CAGR of 24% over FY04-06.
Analysts said government thrust on infrastructure development especially in the power, roads and ports sector holds big opportunity for L&T in the country too.
Larsen & Toubro, a technology-driven engineering and construction organisation, It has interests in manufacturing, services, and information technology sectors too.
L&T has plans to build a new shipyard with an investment of Rs 1,500 crore which would have a separate section to make destroyers and frigates for Navy and Coast Guard. It has identified land to set up the facility at three locations in Tamil Nadu (Chennai), Andhra Pradesh (Kakinada) and Gujarat (Mundra).
It would be set up in 1,200 acres. L&T, which is keen to retain majority equity in the venture, is open to having a small participation from other players.
L&T is already into ship building at Hazira, Gujarat, but the area there is not adequate for expansion and for making large ships.
The company has planned a capital expenditure of around Rs 2,500 crore for FY 2008 and its order backlog at end of March 2007 stood at Rs 35,333 crore, 52% higher than the previous year.
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