Companies

Economic recovery is delayed, not derailed: L&T chief

Mumbai | Updated on August 05, 2021

AM Naik, Group Chairman, L&T

Company remains optimistic about completion of projects under NIP

Larsen and Toubro is cautiously optimistic on its growth prospects in this fiscal with the country’s GDP returning to positive territory thanks to the base effect in the first half of last financial year, followed by robust growth in the second half.

Addressing shareholders at the annual meet, AM Naik, Group Chairman, Larsen & Toubro, said that given the scale of India’s infrastructure deficit, the company remains optimistic about the government’s intent to complete projects as envisaged in the national infrastructure pipeline.

The project pipeline is expected to be collectively funded by the Central government, international financial institutions, State governments, PSUs, and the private sector.

Since infrastructure investments serve the twin benefits of improving productivity and generating employment, the company believes that the underlying macro drivers for investments in India remain intact, Naik said.

“We therefore believe that recovery is delayed and not derailed,” he added.

Diversification

The company continues to focus on shareholder value creation by divesting non-core assets, capturing cost efficiencies, and leveraging technology for productivity gains. The strategically diversified business portfolio, geographical dispersion, robust balance sheet, and strong order book are reliable signposts to a brighter future, he said.

L&T has gradually expanded its international footprint through geographic dispersion as a conscious de-risking strategy. While the West Asia region was an area of focus, the company has started tapping into many countries in Africa and Southeast Asia as well. Currently, the West Asiaregion constitutes 61 per cent of the company’s international order book of ₹68,773 crore. In addition, its technology services businesses are growing in double digits through LTI, LTTS and Mindtree, he said.

L&T’s first priority has revolved around taking every possible care of its employees, contract workers, and society at large. For employees, a broad spectrum of measures were initiated encompassing financial, medical and insurance assistance, and educational support. In addition, quarantine centres were set up for employees, their families, and contract workmen. The company continues to pay contract workers their wages and provide food, shelter and medical assistance, he said.

Published on August 05, 2021

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