Hydrocarbon, infra defer Rs 40K cr worth projects in Q2

Diversified group Larsen & Toubro (L&T) today said that the Indian industry, mainly hydrocarbon and infrastructure, have deferred Rs 40,000 crore worth projects in Q2 FY11.

"We have witnessed orders worth Rs 40,000 crore being deferred in Q2 FY11," L&T CFO Y M Deosthalee told reporters here.

Large contracts sometimes get deferred as the decision-making process is long. Lots of orders have been pushed towards Q4 FY 11, he said.

However, there will be no major impact on L&T's performance as these orders are not cancelled and there are enough indications of orders fructifying in the remaining two quarters of current fiscal, Deosthalee said.

The company said new orders rose 11 per cent in the quarter ended September from a year ago and said it expected to maintain its growth momentum in the medium-term.

L&T's order back-log stood at Rs 1.15 lakh crore as of end-September.

80 per cent of postponement of orders are in the domestic and 20 per cent in the international market, he said.

Deosthalee clarified that these orders relate to the whole sector and are not L&T-specific.

Citing reasons L&T's Senior Vice-President (Finance & Legal) R Shankar Raman, said several infrastructure projects got deferred due to delay in tendering process.

The investment plans in several hydrocarbon projects were also postponed due to global economic situation, European and US crisis and in some cases environmental issues.

However, power sector will remain the dominant segment for L&T in the current year.

"Our power sector orders stands at 37 per cent out of our total order-book of Rs 1,15,000 crore. We hope that share of power sector will go up to 40 per cent of our total order book by FY11," Deosthalee said.

Infrastructure will contribute 30 per cent to our total order-book and the balance will come from hydrocarbon and other sectors, Raman said.