Strong economy drives growth at India’s biggest construction contractor Larsen & Toubro

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

India’s biggest construction contractor Larsen & Toubro (L&T) enjoyed a 34% year-on-year jump in revenue in the quarter ended 30 June 2023, thanks to India’s roaring economy.

Consolidated revenue at the company was ₹ 47,882 crore (US$5.8 billion).

Some 40% of revenue during the quarter came from international markets.

L&T’s earnings before interest, tax, depreciation and amortisation (EBITDA) were up 23% for the quarter, the first of the contractor’s financial year, to ₹ 4,869 crore (US$588.3 million).

Meanwhile, it received ₹ 65,520 crore (US$7.9 billion) in new orders over the period, representing year-on-year growth of 57%.

Orders came across segments including rail, renewables, rural water supply, transmission and distribution and IT & office space.

In its outlook for the rest of the year, L&T said purchasing managers’ indices for manufacturing and services pointed to sustained expansion and there was “buoyancy” in various high-frequency economic indicators.

India saw real GDP growth of 7.2% in the financial year 2022-23.

Earlier this week, L&T announced that its heavy civil infrastructure business had won multiple orders including one from Rail Vikas Limited for the design and construction of an underground metro project.

The work involves building 5km of metro line and four underground stations on the Joka-Esplanade metro corridor in the city of Kolkata.

L&T did not reveal a precise value for the project but classified it as being “large”, which it defines as being between ₹ 2,000-5,000 crore (US$302-604 million).