NEW DELHI, June 17
In tandem with a rebounding economy and steep rise in project spends, the order book of infrastructure firms surged 18.3% in FY24 and the momentum is expected to continue.
The total order book of 25 top companies – across infrastructure, power and capital goods – rose to Rs 12.22 trillion as of March 31, compared with Rs 10.33 trillion as of FY23-end. Engineering and construction major Larsen and Toubro (L&T) topped the charts with an order book position of Rs 4.75 trillion, a 19.1% rise from Rs 3.99 trillion recorded last year. Bharat Heavy Electricals, with an order book position of Rs 1.31 trillion (44.1% rise) came in at second, followed by Hindustan Aeronautics at Rs 94,000 crore (up 14.9%).
L&T expects the order book to rise by another Rs 1 trillion in FY25 as it is bullish on India and other markets. “My sense is that investment in infrastructure in the country will continue and that’s the backbone for a competitive economy. We continue to be bullish on other markets where we operate in, such as the Middle East, Far East or Africa,” L&T president and CFO R Shankar Raman said. The total order book position of top 25 firms had risen 9.7% in FY23 from Rs 9.42 trillion during the year-ago period. “Many aspects add up to the order book building. To sustain and drive the GDP growth to enable India to reach a $5-trillion economy by 2025 itself calls for huge spending on the basic industrial and urban infrastructure building,” N S Rao, Group CFO at Ramky Group said.
“With the required thrust on three major planks viz. physical, digital and energy infra development, there would be huge scaling up of demand on the existing and emerging infra players besides a significant structural shift. The sustainability angle adds up to the shift that is needed to elevate low ranking India up in the ND-GAIN Country Index,” he added.
However, the order book of some of the companies dipped during the reporting period. Kirloskar Brothers saw the highest fall of 40.6% in its order book to Rs 2,999 crore, while that of Dilip Buildcon declined 31.4% to Rs 17,432 crore from the previous fiscal. Ashoka Buildcon with a 26% dip (Rs 11,697 crore), Ahluwalia Contracts with a 22.7% slide (Rs 11,180 crore) and KNR Construction with an 8.3% fall were the others in the list. With infrastructure and allied firms hiking capex for FY25, the outlook for the industry is also positive. Companies such as JSW Steel has earmarked a capex of Rs 20,000 crore (Rs 17,000 crore last year), UltraTech Cement Rs 9,500 crore (Rs 9,187 crore in FY24), Jindal Stainless Rs 4,700 crore (Rs 3,800 crore last year) for FY25.
