Huge Potential Seen in Defence Under 'Make in India': L&T

New Delhi: Eyeing big-ticket investment opportunities in the defence sector under the government's 'Make in India' drive, engineering and construction giant Larsen & Toubro sees a huge scope in areas such as submarines, nuclear power equipment and artillery. The infrastructure major, which saw its bottom line surge 19 per cent to Rs 1,034.8 crore in the last quarter, has listed "indigenisation thrust for defence equipment", "interceptor boats, naval vessels and submarines for Indian Navy and Coastguard" and "artillery guns and other equipment for Indian Army" as investment opportunities. L&T, in an investor presentation, has also listed "oil and gas equipment supply opportunities in India and key petroleum/petrochem (petrochemicals) producing regions", "nuclear power plant equipment in India and "components for Indian space program" as potential areas. However, the company has also underlined challenges in heavy engineering and defence segments as "shrinking spends on oil and gas with low crude price" and "reduced prospect base of nuclear power equipment post Fukushima and consequent Indian civil liability overhang." It also sees "very long prospect-to-award timelines and dominance of public sector and foreign OEMs (original equipment manufacturers) in Defence orders" as another challenge. L&T Heavy Engineering manufactures and supplies custom designed equipment to critical process industries such as refinery, petrochemical, and oil and gas, as well as to sectors such as nuclear power, aerospace and defence. Likewise, its shipbuilding arm has global scale heavy manufacturing facilities. Heavy engineering segment of the company has achieved a customer revenue of Rs 884 crore for the quarter ended December 31, 2015, registering growth of 9 per cent over the corresponding quarter of the previous fiscal year, mainly contributed by defence and aerospace business. International sales constituted 52 per cent of the total customer revenue of the segment. The order book of the segment stood at Rs 8,180 crore as of December 31, 2015. L&T is India's largest E&C company with interests in projects, infrastructure, development and manufacturing, among others. Its revenues stood at $15 billion last year and the company has a market cap of $18 billion as on December 31, 2015. L&T is aiming to restructure its top management as part of its succession plan as well as making efforts to expand its global presence. Group executive chairman A M Naik had recently said that the company is looking to expand its global presence.

Huge Potential Seen in Defence Under 'Make in India': L&T

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