Larsen and Toubro (L&T), India’s largest engineering and construction company, said it is yet to see any meaningful increase in order inflow from private sector, where profit margins tend to be higher and contracts are more flexible than government orders.
“It’s predominantly government driven story right now. Government is the biggest spender on infrastructure as well as other social spending. We see some offshoots of private sector in minerals and metals space, but it’s too early to comment on it,” said SN Subrahmanyan, Chief Executive Officer and Managing Director of L&T.
Subrahmanyan added that it could take another two years for the private sector orders to come back.
L&T said it had to prune its order book by Rs 16,000 crore as some developers in real estate faced liquidity issues. This was the second tranche of order book cleansing by the company in FY18.