New Delhi: Larsen & Toubro, India’s top engineering and construction firm, hopes to maintain sales growth of 30% in the next fiscal year, though orders were slowing, a senior company official said on Friday.
Larsen board member JP Nayak said the firm was not facing any resistance from institutional investors over a possible deal to buy fraud-hit outsourcer Satyam Computer Services.
Larsen, which has interests ranging from construction to software, had seen some slowdown at its manufacturing divisions and in project orders from the power and road sectors.
“There will be (sales) growth of about 30% this year. We are confident we will be able to maintain that,” Nayak told reporters on the sidelines of a business conference, referring to the next financial year from 1 April.
“That is our hope, a lot will depend on the incoming orders in the next six months,” he said.
The firm is optimistic that a strong order book will enable to weather the economic slowdown.
Larsen had orders worth Rs68,000 crore ($13.4 billion) at the end of Janaury, which would be executed over the next two years, Nayak said. But the outlook was uncertain.
“With the elections being there, there could be a virtual stop in the government orders coming through. That can affect the order book,” he said.
India will vote in a national poll by mid May and dates are expected to be announced soon.
No Resistance On Satyam Deal
Larsen, which runs a smaller software firm, has built up a 12% stake in Satyam and is seen as a leading contender to buy the firm. Satyam’s board is firming up plans to find a strategic buyer to secure its future after being hit by India’s biggest ever corporate scandal.
The Economic Times, citing an unnamed source at a financial institution, reported on Friday that Larsen, in which Indian insurance firms and financial institutions own more than 30%, might be asked not to bid above Rs50 per Satyam share.
“There is no pressure on us from any quarter, I can assure you,” Nayak said, when asked about the view of institutional shareholders to any deal.
Another newspaper reported Satyam’s board wants to offer no more than 31% of the firm in new shares to a strategic buyer, whereas suitors are looking for a controlling stake.
“This is all speculation by media. Let’s wait and see what the board decides. They will come out with their plan. At that point we can decide,” Nayak said. “Our interest will be determined by what the Satyam board decides.”