Larsen & Toubro Ltd Asia’s largest construction company by market value is betting on road and rail orders in India and overseas to help maintain growth as power generation projects stall in the South Asian nation.

Mr R Shankar Raman Chief Financial Officer of Larsen & Toubro said that the company sees an opportunity of as much as USD 35 billion to build highways, rail networks and small airports in the next two years.

Larsen added INR 65 billion (USD 1.2 billion) of road construction contracts in the first quarter of the year that started April 1.

Mr R Shankar Raman said that “Road is one area of opportunity in all this compressed investment environment. Contracts in the “third and fourth quarter are expected to pick up.”

Lack of coal and gas supplies to fire electricity plants have hindered expansion plans of utilities in Asia’s third largest economy, prompting Larsen to increase focus on infrastructure projects. The company also expects more orders to build transmission networks in India after the world’s biggest blackout last week knocked out power for half of its population.

Mr Dhananjay Mishra an analyst at Mumbai based Sushil Finance Consultants Ltd said that “Larsen is in a better position than its peers because of its diversified business portfolio Even in a depressed investment climate, it can still find orders to grow.”

Source - Bloomberg

(www.steelguru.com)