The Hindu Business Line : L&T increasing global play to hedge market risk

New Delhi, June 12 Engineering major Larsen & Toubro Ltd hopes to ride out the economic slowdown concerns and inflationary pressure in the domestic market by stepping up its international operations. Maintaining a revenue growth guidance of 25-30 per cent for the current fiscal, L&T’s Chairman and Managing Director Mr A.M. Naik, on Thursday said the company is looking at increasing revenues from overseas operations to around 25 per cent in the coming years, from the current 16 per cent.

“While we would continue out focus on the infrastructure segment in India, we are also being cautious now in the current economic situation. We have put a lot of pressure now to increase our business to manage the risks of being in one geography, which is India, to being more in the Gulf, just in case Indian projects get delayed,” Mr Naik told presspersons here. He said the company was confident that it will be able to maintain its growth momentum despite talks of an economic slowdown and inflationary concerns, especially on the oil front.

The company’s overseas operations, Mr Naik said, currently contribute about 16 per cent of the total revenue. “This can go up to 25 per cent,” he said.

Delays listing

Mr Naik also said the company will delay listing of its software unit L&T Infotech to fiscal 2009-10, as the unit has not reached the envisaged “revenue threshold” and the prevailing market conditions are “unfavourable”.

L&T Infotech was earlier slated to go in for a public offering in the second half of the current fiscal. On the capacity expansion planned for the current fiscal, Mr Naik said the company would invest Rs 2,500 crore to augment capacities at its growth centres.

In 2007-08, L&T had recorded revenues of Rs 29,600 crore. He said joint ventures between L&T and Mitsubishi Heavy Industries for manufacturing super-critical boilers and turbine generators would be operational within the next 12-18 months. While L&T holds 51 per cent in the venture, Mitsubishi controls the remaining 49 per cent.