In a significant shift, the share of Larsen & Toubro (L&T) from West Asia in its international engineering and construction orders has seen a decline, dropping to 60% in FY25 from 70% in FY24. This change comes as the company expands its reach into other regions, particularly Central Asia, where it has secured notable contracts, including projects in Uzbekistan.
Shifting Focus to Central Asia
R. Shankar Raman, the director, president, and CFO of L&T, shared insights during a recent media call, explaining that while the percentage of order inflow from West Asia has decreased, the absolute value remains unchanged. "We’ve diversified our portfolio and achieved success in Central Asia, particularly in Uzbekistan," he remarked.
L&T’s recent successes in Uzbekistan include:
- Establishing a data center
- Developing a renewable energy facility
- Constructing an airport in Tashkent
Navigating Opportunities in Africa
Raman also discussed the company’s past ventures into Africa, where they’ve explored opportunities in countries like Kenya, Tanzania, and Algeria. However, he noted that their approach remains highly selective, emphasizing the importance of factors such as safety, stable political environments, and funding from multilateral organizations.
Impressive International Order Portfolio
L&T’s total order value stands at ₹3.56 lakh crore, with 58% of this coming from international markets—approximately ₹2.1 lakh crore. Of this international business, West Asia continues to play a crucial role, contributing about 60%.
In terms of specific countries, Raman highlighted:
- Saudi Arabia: ₹60,000 crore ($6 billion), making up a substantial 25% of their international orders.
- UAE and Qatar: Each contributing about 16% and 17%, respectively.
Renewable Energy Ventures in West Asia
Raman noted the growing focus on renewable energy within West Asia, particularly in countries like Saudi Arabia and the UAE. As these nations aim to conserve their oil for exports and shift toward renewable sources, L&T is poised to capitalize on emerging opportunities in solar energy and other sectors.
Expanding Beyond Oil and Gas
Reflecting on the evolution of their business in West Asia, Raman stated, "Ten years ago, our focus was primarily on oil and gas. Today, we are involved in a broader spectrum of infrastructure and industrialization projects." This shift is evident in their recent contracts in Saudi Arabia for the installation of 380kV overhead transmission lines and various substation projects in the UAE and Qatar.
Looking Ahead
L&T anticipates a promising future, with projected order prospects reaching ₹19 lakh crore for FY26. This includes ₹7 lakh crore in domestic orders and ₹12 lakh crore in international orders, reflecting the company’s robust growth strategy and commitment to diversifying its portfolio across various regions.
In summary, L&T’s ongoing projects and strategic expansions illustrate its agility in adapting to changing market dynamics, positioning itself as a leading player not only in West Asia but also in burgeoning markets like Central Asia and beyond.
