L&T Bags More Orders In First 22 Days Of April Than In Entire Fourth Quarter
India’s largest construction company bagged more orders in the first 22 days of the ongoing financial year than what it received in the entire quarter ended March, at a time the Covid-19 pandemic threatened global growth and crude oil prices plunged.
Larsen & Toubro Ltd. announced 10 orders in the first three weeks of April, most of which are from Indian clients, according to exchange filings. That compares with seven in the January-March period.
The conglomerate—seen as a barometer for private investments in India—doesn’t disclose the exact value of orders due to confidentially issues. It, however, classifies them into four buckets: ‘significant’ (Rs 1,000-2,500 crore orders), ‘large’ (Rs 2,500-5,000 crore), ‘major’ (Rs 5,000-7,000 crore) and ‘mega’ (more than Rs 7,000 crore).
L&T, according to data collated from the filings, received orders worth anywhere between Rs 18,500 crore and Rs 37,000 crore during the period. To be sure, these do not include orders less than Rs 1,000 crore and services and sensitive orders that are not disclosed.
This comes when the coronavirus outbreak forced India to put its 1.3 billion citizens under the world’s strictest lockdown, stalling all but essential activities. A pricing war in the Brent crude oil market has only made matters worse for L&T that does considerable business in the Middle East.
The construction company is expected to miss its order guidance for the financial year ended Mar. 31, 2020. While it received better-than-expected order inflow in the third quarter, it bagged only a third of its fourth-quarter target of Rs 66,000-70,000 crore needed to meet the full-year outlook.
L&T is yet to declare its results for the fourth quarter.
Credit Suisse’s analyst Lokesh Garg said L&T has reported its usual flurry of April orders and created a buffer for FY21. According to Citi Research, these orders were most likely won before the lockdown started and the announcement is being made with a lag. A strong order inflow announcement, Citi analyst Atul Tiwari said, underlines the competitive position of L&T.