Larsen & Toubro eyes road sector as government focuses on highways

L&T eyes road sector as govt focuses on highways

As the government looks to double the length of the country’s highways to 2 lakh km, engineering and construction giant Larsen & Toubro has said it sees huge opportunities in the sector.

It has, however, listed out a number of challenges facing the roads sector, including funding constraints.

In a presentation to investors, L&T has listed the “increased road build-out by NHAI with current focus on EPC (engineering, procurement and construction) projects” as “opportunities”.

In the last two weeks alone the government has bid out 31 projects worth Rs 28,000 crore, of which nearly half were under the EPC mode.

The infrastructure major saw its bottom-line surge 19 per cent to Rs 1,034.8 crore in October-December.

L&T also eyes “expressway projects by state governments, elevated corridors and ring roads in major cities” as some of the other opportunities in the investor presentation besides dedicated freight corridor programme and highway projects in the Middle East.

As for challenges in the infrastructure segment, it has listed “investment constraints, lending capacity of banking system, lack of private sector interest in PPP projects, land acquisition, government funding, environmental clearances, slow evolution of policy frameworks, pace of awards and execution.”

It also sees “oil price-led fiscal deficits in the Middle East” as another challenge.

L&T’s road and bridges portfolio has 16 projects for 1,721 km worth Rs 17,800 crore.

L&T is India’s largest E&C company with interests in projects, infrastructure, development and manufacturing, among others. Its revenues stood at USD 15 billion last year and the company has a market cap of USD 18 billion as on December 31.

L&T is aiming to restructure its top management as part of succession plan as well as making efforts to expand global presence.

Group Executive Chairman A M Naik had recently said the company is looking to expand its global presence.

[Source:- Businesstoday]