New Delhi: Larsen and Toubro Ltd (L&T) India’s biggest engineering firm, expects to improve its 25% order growth forecast for this year mainly on new contracts from oil and gas and power sectors, chairman A.M. Naik said.
“Power business is growing for us,” Naik said on Thursday. The company expects to end the year with an order backlog of Rs20,000 crore from about Rs1,050 crore last year, he said.
Indian companies are adding generating capacity to tap expanding demand in the world’s second fastest growing major economy which faces peak-hour shortages of 12.6% this year, according to the Central Electricity Authority. Prime Minister Manmohan Singh has pledged to spend Rs56,960 crore to add power plants and transmission lines in the year to 31 March.
Positive outlook: Larsen and Toubro’s chairman A.M. Naik. Ashesh Shah/Mint
The government plans to add 78,700MW of generation capacity in the country in the five years to March 2012 and 100,000MW in the following five years. L&T also expects to win orders in the oil and gas sector in the Gulf region as oil prices have risen, Naik said.
Crude oil, which has gained 53% this year, will average $70 (Rs3,367) to $75 a barrel in 2010, Nouriel Roubini, a New York University economist, who predicted the financial crisis, said last month. L&T shares, which have more than doubled this year, gained 1.4% to Rs1,658.35 at close of trade on Thursday.
Meanwhile, L&T said it had received an order worth more than Rs2,000 crore to set up a gas-based power plant for GMR Energy Ltd. The power plant is to be set up in Andhra Pradesh, the company said in a statement.
Reuters contributed to this story.