INSUBCONTINENT EXCLUSIVE:
Mumbai: Larsen - Toubro (L-T) has bagged a turnkey contract for building a power generation project worth over Rs 7,000 crore after a dry
spell of three years.
The company will do engineering, procurement and construction (EPC) for the 1,320 mw ultrasupercritical power plant in
Buxar district in Bihar, for SJVN Thermal Private
This order, among the biggest the company has received for a power generation project, would help its power equipment business which has
first order in three years
We have been bagging jobs for flue-gas desulphurisation (FGD) units that has kept the order book going at a time when there are no orders
generation projects business has an order book of Rs 18,000 crore, he said.
Analysts believe that while this big order may not be an
indication of recovery in power sector, L-T would be a main beneficiary of the government's focus on infrastructure sector and public
sector capex.
"We expect infra capex to revive from H2FY20
This would aid L-T to achieve its guidance of around 10-12 per cent order inflow growth
In addition oil - gas capex in Middle East countries, and India should provide impetus to orderbook and earnings growth
With these, we initiate coverage on L-T with 'Buy' rating and target price of Rs 1,820," brokerage Anand Rathi said in a recent
report.
Shares of L-T closed at Rs 1,541 on the BSE on Monday, almost flat from its the previous close.
Given the lack of activity in
coalbased power generation sector due to poor financial health of companies and other challenges faced by the beleaguered sector, L-T has
found new business opportunity in retrofitting of old plants with emission control equipment (FGD and SCR), but the average ticket size of
If industrial growth has to happen, power capacity has to be increased to support it
According to the 19th Electric Power Survey Report, we will have a peak demand for reliable power of 299 gigawatts (GW) by 2026-27
He is also a director at L-T.
Before the SJVN order, the last order L-T bagged for a power generation project was in August 2016 from
Neyveli Uttar Pradesh Power, worth Rs 3,860 crore
Lack of new projects and aggressive bids for the few that have come up have resulted in declining revenue and reduced order book for the
company, much like its peers catering to the power sector
L-T has two joint ventures with Mitsubishi Hitachi Power Systems for core equipment for power plants, both running below capacity at Hazira
The turbine manufacturing unit is running at 30 per cent utilisation while the boiler unit is better off at 75 per cent utilisation owing to
some export orders from the JV partner.
