Larsen & Toubro (L&T) is in "need" to book orders to build equipment for coal-fired power plants or else its production line may go empty.
Larsen & Toubro (L&T) is in "need" to book orders to build equipment for coal-fired power plants or else its production line may go empty.
However, at the moment the conglomerate's production line has sufficient order to keep the men and machines going.
"The power sector has two aspects of it, one is coal-fired thermal plants, which our factories build. We normally concentrate on super critical ones, that is greater than 10,000 mw," said S N Subrahmanyan, chief executive officer and managing director.
At present, L&T has an order from Bangladesh for a gas-based power plant. The engineering-to-services company "has done three of them (gas-fired plant orders for Bangladesh) and have bid for the fourth one where it is L1 (lowest bid). "The prospects of gas-fired power plants are not only there in Bangladesh, but we see it even in the Middle East and other places, and we continue to pursue them. But for gas-based power plant, we don't supply the turbines. It is through one of the big names," said Subrahmanyan.
As gas turbines are made by some other established global firms, the Indian giant is on a lookout for thermal projects that are being bid out for construction anywhere around the globe.
"Where we need orders is the coal-fired power plants, to fill up the factories – both turbines and body. As much as we see, turbine is okay for another year not only because of the existing domestic orders which we got earlier but also some of the export orders we got. We have sufficient boiler orders. So there is no panic right now, but the factories they need orders and when we get an order, we take some time to design and build. Therefore, there is a need to book an order in the next six to eight months. We need to pursue that," Subrahmanyan said during the third-quarter results announcement.
Meanwhile, on markets regulator Security & Exchange Board of India's rejection of L&T buyback application, he termed the decision "harsh".
R Shankar Raman, L&T's chief financial officer, said, "We should not lose sight of the plot of value creation. Is dividend going to create value? Is share buyback going to create value? Is investment going to create value? These are several options that the company will have in front of it. This company will look at all options."
The company's net profit surged 37% year on year in the third quarter to Rs 2,042 crore. This strong growth was due to strong execution in project businesses coupled with performance in services businesses.
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As gas turbines are made by some other established global firms, the Indian giant is on a lookout for thermal projects that are being bid out for construction anywhere around the globe.
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