Slowdown in orders due to weak macro environment: L&T

In an interview to CNBC-TV18, SN Subrahmanyan, whole-time director & senior executive vice president, L&T talks about the latest happening in his company and sector. He also outlines what the road ahead looks like for Larsen & Toubro.

Below is an edited transcript of his interview. Watch the accompanying video for more. Q: If you can tell us how much you have bagged entirely in the first quarter? The orders that you have received, are they a carry over from what was not given in FY12? Is this just a pushover or do you think this are new order inflows that are coming?
A: We have been releasing press orders for the last three months. These are orders which we have secured during the quarter. Of course, a few of the orders are increases in contract value from existing orders that we have. As you can see from the press release today, all the verticals within the construction division have managed to secure orders and that is where we are. Q: Have you seen a pick-up in order inflow over the last few days, is it more because of your competitive positioning or has there been a sector wide pick-up in terms of orders being given?
A: I would look at it slightly differently. It is not a prevailing situation where due to various reasons both global and domestic there is some slowdown in general movement of orders and projects. What is known out here is due to Larsen & Toubro’s goodwill and the way we go about projects, now it is important that contractors who deliver on time and of a certain quality are the ones who are benefitting.
Being L&T, I think we have benefitted during the last three months on the goodwill that is prevalent upon L&T. Wherever clients are going for some expansion or some projects, we have benefitted out of the situation due to our reputation. Q: What we are trying to gauge is whether things are on the mend in terms of order book increase? On a pro-rata basis compared to last year, would you say you are better off in terms of orders or at least as good?
A: I would hesitate to say that at the moment because we have had some changes at the central level. We are cautiously optimistic and we look forward to the good tidings but to say that things are totally on the mend, I would hesitate to say that. Q: Has it been a case of margins also getting trimmed a bit because there are not so many orders coming by and you have to work harder?
A: Pressure on margins is always there but as you are aware, we place a lot of insistence on getting good quality orders. Therefore we have not compromised on our profitability as such till date. I hope the situation does not deteriorate as we go forward. We are optimistic about it.