India’s economic tailwinds propel Larsen & Toubro’s construction business growth

Larsen & Toubro’s office in Faridabad (Imge: Batmaniacs, CC BY-SA 4.0, via Wikimedia Commons)

The company’s infrastructure projects division secured an order inflow of ₹ 142,589 crore (US$17.1 billion) in the year to 31 March 2024, according to its latest financial results. That represented an increase of 22% on the previous year.

Larsen & Toubro attributed the growth to capital expenditure by the Indian government and “continued buoyancy” in the Middle East region.

Its international orders over the same period totalled ₹ 54,641 crore rupees (US$6.5 billion), which constituted 38% of the total order inflow of the segment during the year.

In the final quarter of the year, the infrastructure projects division saw a 24% fall in secured orders, totalling ₹ 31,340 crore rupees ($3.8 billion), which the company said was due to strong comparatives in the previous year, when it received several high-value orders.

For the year ended 31 March, customer revenues were ₹ 112,551 crore ($13.5 billion), representing growth of 30%. International revenues constituted 30% of the total.

The company’s EBITDA margin was “subdued” at 6.2%, which it said was as a result of costs arising from the supply chain and logistical issues.

Larsen & Toubro’s construction operations form a significant part of a major conglomerate that is also involved in operations as diverse as financial services, oil and gas, power, minerals and metals, heavy engineering and shipbuilding.

Its total consolidated revenues for the year were ₹ 221,113 crore (US$26.5 billion), which represented year-on-year growth of 21%. The company said this was facilitated by execution of a large order book in its projects and manufacturing businesses. International revenues constituted 43% of the total as multiple international projects ramped up.

S.N. Subrahmanyan, chairman and managing director of Larsen & Toubro said, “We are confident that our new age businesses such as green energy, semiconductor chip design, digital platforms and data centers will harness the power of technology and compliment the growth of our traditional core businesses in accelerating our strides towards our perspective plan targets.

“Recently, some of our marquee projects were inaugurated / completed such as Atal Setu and Coastal Road project in Mumbai. The company also played its part in the construction of the iconic Ram Mandir at Ayodhya which was consecrated on January 22, 2024. This faith posed by our customers on our capabilities to complete iconic and complex engineering projects in a time-bound manner with highest standards of quality and safety continues.

“Despite the ongoing geo-political turmoil globally, the growth story of India continues to power forward and we as a Company are proud to be an integral part of this change. The tailwinds of India’s economic growth will continue due to the impact of structural reforms, strengthening physical and digital infrastructure, improving institutional strength and strong governance.”