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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (9136)	10/29/1999 1:32:00 PM
From: Mohan Marette	Read Replies (2) \| Respond to of 12475

L&T expects sales growth of 10% larsentoubro.com 29-10-1999 22:12:53 Engineering & construction and Cement giant Larsen & Toubro Ltd`s sales for the current financial year are expected to rise by 10% according to , the company`s managing director and chief executive officer A.M. Naik. Addressing a press conference in Mumbai, Naik said, "The second half is expected to be much better." His optimism stem from the fact that with a stable government in place and government`s resolve to push the economy, and more important the infrastructure sector, L&T would stand to benefit. L&T`s sales are highly economy sensitive sectors. Naik announced that the company had an order backlog of Rs66.86bn by end-September. L&T has booked fresh orders worth Rs41.63bn during April-September 1999, up 11% compared to Rs37.42bn booked in the same period of last year. Executive Director, Mohan Karnani, in charge of the company`s cement business said, L&T sold 4.9mn ton of cement and clinker in the six months to September 30, 1999 compared to 4.08mn ton in the same period a year-ago period. Cement demand in the first six months of the current year grew by 20% as against 6% during the same period of last year. Clinker production grew 41% to 5.25mn ton during the first half against 3.72mn ton in the same period a year-ago. Naik said operating margins on cement have improved to 19% during the period from 6% due to a 17% reduction in manufacturing costs, mainly in power, fuel and packing costs. Karnani added, "Though we have seen volume growth market prices of cement continues to be low but despite this L&T`s sales realization has gone up by 5%." Naik informed that the company had bagged two orders in the international market, "though small these order are a tribute to the company`s capabilities." One order is for a polypropylene plant in USA and the other for a Shell refinery in UK. L&T plans a hydrocarbon thrust L&T has entered into a MoU with IOC for future business opportunities in hydrocarbon sector. L&T is picking up 26% stake in IOC`s two power plant in Gujarat and Haryana. The two have bagged an order for modernization of a refinery in Trinidad. IOC has signed a MoU with an international player for setting up a LNG terminal at Kakinada in Andhra Pradesh, and L&T is keen on picking up a stake in the project. Slowdown in Software business Y. M. Deosthale, director finance, L&T and in charge of the company`s software thrust said that the company`s software business slowed down in the first six months as there was a slowdown of orders from the American companies as they were preparing for the Y2K. Deosthale expected the orders to start flowing in by December. "During the first six months we have spent money in building the organization, in setting up new offices and hiring more people which has resulted in higher admin costs." (Probity)