SPREADING WINGS: Chairman A M Naik optimistic investments in targeted geographies would yield salutary returns
Despite various global geopolitical uncertainties, Larsen & Toubro (L&T) will continue to focus on certain international geographies including the Middle East.
"Our clear thrust is towards renewable energies, hydrocarbon expansion and non-oil revenues in the Middle East as well as significant investments in infrastructure in non-Middle East geographies where the Company has consolidated its presence," L&T's group chairman A M Naik in the company's annual report.
Naik referred to the worldwide uncertainties that are evolving towards unfavourable environment for the last few months now, right from Brexit to trade tariffs.
OVERSEAS PUSH
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- During the last fiscal, about 31.99% of L&T's consolidated gross revenue from operations came from its international markets
- In terms of the order book, about 21.56% of L&T's consolidated order book as of FY2019 end was outside India
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"On the international front, optimism and growth are being held hostage to geopolitical uncertainties such as Brexit, the flaring of protectionist tendencies and the combustible issue of trade tariffs. Current consensus forecasts point to a slowdown in the world economy in 2019, precipitated by higher oil prices in 2018 and tempering of US growth, even as the US Fed is under pressure to adopt an accommodative monetary stance," he said.
However, despite these odds that all the companies and economies that have to face, including L&T, he is optimistic about company drawing "salutary returns".
Naik's statement comes in the backdrop of geopolitical uncertainties brewing in the recent past.
For L&T, the recent volatility in crude oil prices due to political and economic crosscurrents has led to reduced investments in Organisation of Petroleum Exporting Countries regions (Opec).
L&T's substantial revenues come from its international businesses. During the last fiscal ended March 31, 2019, about 31.99% of L&T's consolidated gross revenue from operations came from overseas markets. Last fiscal, L&T's consolidated gross revenue from international operations stood at Rs 45,109 crore as compared to Rs 95,898 crore from domestic operations.
In terms of the order book, about 21.56% of L&T's consolidated order book as ofFY2019 end was outside India, which is Rs 63,266 crore as against Rs 2,30,161 crore from within India.
Meanwhile, L&T Infotech and L&T Technology Services accelerated their growth thrust in the US and European markets.
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