AM Naik expects good FY20 for L&T on strong orderbook, but moderate infra sector growth

A strong opening order book is likely to help Larsen & Toubro (L&T) post a good FY20, according to Group Chairman, AM Naik.

However, he expects slower growth for the infrastructure sector in FY20. In an interview with CNBC-TV18, Naik said, political agenda might result in capital flowing from the infrastructure to the agriculture sector.

"If there is a much wider spectrum of parties that come together and come to power, the government may not be very strong. Therefore, for one year after the election, I do not see a lot of growth for the sector, especially if there is a coalition government," he said.

L&T's order book is good and so elections may not hurt revenue.

He does not expect any major recovery in private sector capex. "In a country like India, demand is not a problem. But where is the equity? Promoters need to have equity for a bank to rise up and give them a debt," he said.

Defence sector, he said, may not grow in leaps and bounds but will most likely post steady growth. He expects it to contribute roughly 10 percent of revenue over the next 6-7 years.

Naik said that he is not worried about L&T's exposure to IL&FS. He added that the company is looking at many IT companies aside from Mindtree for acquisition. "Expect some acquisition announcement over the next 2-3 months. Any good proposal will be looked at seriously," he said.