The Hindu Business Line : L&T order book likely to grow 30% by March

Watch demand supply: Mr K.V. Kamath, Managing Director & CEO, ICICI Bank, and Mr V.M. Deosthalee, Chief Financial Officer, Larsen & Toubro, at the 5th CFO summit held in Mumbai on Tuesday. Mr Kamath said interest rates are not likely to see a downward movement in this fiscal and banks need to watch the demand supply situation.

Our Bureau

Mumbai, Feb. 5 Engineering major Larsen and Toubro is likely to see its order book increase by an additional 30 per cent by March 2008. This would translate into a revenue growth of about 25 per cent over the next three- to five-year period, said Mr Y.M. Deosthalee, Chief Financial Officer, L&T. In the current fiscal L&T is likely to see its revenues rise by 35 per cent, he said.

Speaking to reporters on the sidelines of a CII seminar, in Mumbai, today, Mr Deosthalee said that the company is targeting to increase the share of sales from international orders to total sales, from the current level of 16 per cent to 20 per cent by 2009-10. “We are expecting more growth from the Middle-East,” he said.

About the interest rate scenario, Mr Deosthalee said there is no case for rates to increase. “If inflation is managed the way it is being done today, there is no need to increase interest rates. If there is some dip in growth RBI may look at reducing rates marginally. In the monetary policy the RBI has indicated to banks to reduce rates. If that does not happen, RBI will ask banks to do it,” he said.

According to Mr Deosthalee, industries like auto, which are dependent on retail borrowing, are the only ones to have been hit by the interest rate hike. Those companies that are adding capacity have not been affected, as there are other avenues to raise funds.

On expectations from the Budget, he said that as the infrastructure industry needs lots of funds for investment, there is need to incentivise investment for the infrastructure sector. “I am sure the Finance Minister may do something for retail investment to flow into the infrastructure sector. We are also expecting ECB relaxation for infrastructure,” he said.

L&T Infotech, the software arm of L&T, has been impacted by the rupee appreciation, just as other software companies. “Companies will have to learn to live with rupee appreciation and increase their productivity,” he said.

L&T Infotech may debut on the stock markets with its IPO in the second half of 2008-09, he added.

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