L&T first pvt firm in India with Rs 1,00,000-cr order book

Larsen & Toubro (L&T), the largest technology, engineering and construction company in India, has accumulated an order book worth over Rs 1 lakh crore.

“We are the first private sector player in the country to achieve this feat,” said A M Naik, chairman and managing director of L&T, after receiving the annual ‘Best Company of the Year’ award of Business Standard here yesterday.

The government-owned power equipment maker, Bharat Heavy Electricals Ltd (BHEL), is the only company ahead of L&T in this regard, with an order book of over Rs 1.5 lakh crore, said sources.

The $8.5-billion (Rs 38,300 crore) turnover L&T had reached an order book position of Rs 91,104 crore as on December 31, 2009. Of this, the engineering and construction sector’s contribution was Rs 89,375 crore. It got another lot of orders worth more than Rs 9,000 crore in the past two-three weeks. The current order book position of the construction division alone was close to Rs 60,000 crore, said sources.

L&T’s operations are mainly grouped under engineering and construction, electrical and electronics, and machinery and industrial products.

“While public sector players such as BHEL get orders from the government by default and due to the ongoing huge power generation capacity addition programme, companies like L&T must compete with several international players to bag orders,” said an industry expert.

However, gross sales revenue for L&T during the quarter ended December 31, 2009, was six per cent lower at Rs 8,139 crore against the corresponding period of the previous year. This was despite 22 per cent growth in order inflow during the period.

L&T reasoned that sales revenue was subdued as a result of slower progress of certain jobs due to various extraneous factors, as well as the effect of delayed financial closure on a few infrastructure projects. Deferment in release of some high-value customers’ orders, including those in the hydrocarbon upstream sector, also resulted in lower sales during the quarter.

“Typically, our projects are executed over a period of 24-36 months and the order book position is poised for more growth,” said a company executive.

Today, the company said it had won a design and build order worth Rs 566 crore from software firm Cognizant Technologies Solutions India for construction of their campus at Chennai and a Rs 280-crore order for constructing multi-storied residential apartments at Gurgaon in Haryana.

Recently L&T had won a Rs 1,013-crore turnkey project for redeveloping four oil well platforms in the second phase of Mumbai High North (MHN), and an order worth Rs 2,035 crore from ONGC Mangalore Petrochemicals (OMPL), to construct a petrochemical aromatics complex to come up at a special economic zone in Mangalore.

A week ago, L&T’s construction division had bagged six orders aggregating Rs 1,181 crore for construction of power transmission lines and substation works, which included three orders worth Rs 741 crore from the Gulf markets. Larsen & Toubro (Oman) LLC, a subsidiary of L&T in Muscat, also bagged a Rs 668-crore order recently for constructing various buildings and infrastructure projects in the Sultanate of Oman.