MUMBAI Larsen & Toubro Ltd said it is bidding for projects in Far East and Africa to counter a slowdown in its key Middle East market, which has been hurt by lower oil prices, as the industrial group forecast faster sales growth.
L&T, viewed as an indicator of the health of Asia's third-biggest economy, expects orders to increase 15 percent in the year to March 2017, and revenue during that period to rise between 12 and 15 percent, Group Executive Chairman A.M. Naik said.
That compares with an order book growth of 7 percent and revenue growth of 12 percent in the last fiscal year.
"We are seeing a little better prospect than last year," Naik told a news conference on Wednesday, as the company reported a better than expected 19 percent rise in consolidated net profit to 24.54 billion rupees ($364.2 million).
L&T has been betting on government spending on infrastructure building in home market as private investment remains sluggish. While there is "some movement" in railways and highways sectors, others needed catching up, Naik said.
"We are bidding in Africa and Far East -- the two territories that we have not concentrated on so much before. That will make up for any shortfall from the Middle East," he said.
Middle East accounts for a fifth of L&T's total order book and is its biggest international market.
The company is also looking to bid for projects in Iran, where it has opened an office, but will move "a little cautiously", Naik said.
L&T's software services business, L&T Infotech, has filed for an initial public offering. The company will decide within a week on the timing of the IPO, Naik said.
Ahead of the results, L&T shares gained 4 percent in a Mumbai market which closed 2.4 percent higher.
($1 = 67.3825 rupees)
(Writing by Devidutta Tripathy, editing by Louise Heavens)
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Published Date: May 25, 2016 11:00 pm | Updated Date: May 25, 2016 11:00 pm