LT bags orders worth Rs 1100cr, sees Gulf as thrust area

Larsen and Toubro , on Monday, bagged two engineering, procurement, and construction (EPC) orders worth Rs 1,100 crore in the hydrocarbon segment. K Venkataramanan, its MD and CEO says that international orders are challenging given the new geography, but Gulf will be a major driving force going forward.  The company has received order from UAE and Qatar, he elaborates on the orders to CNBC-TV18 in an interview.

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Below is an edited transcript of his interview to CNBC-TV18.

Q: These orders are from Gulf countries. Is it going to be the space which will bag you many orders as your past announcements have been from there?

A: We are a strategic brand for the Gulf market. Our set up is divided into two headquarters, one in UAE and the other Saudi Arabia. These are two jobs in PDOShell Oman (Petroleum Development Oman). This particular job (order) is from UAE.

The second one is add-on to job we had got in Qatar from Dolphin Energy. Going forward, other than the important Indian customers like Oil and Natural Gas Corporation ( ONGC ) and Reliance Industries Ltd (RIL), we certainly are looking at Gulf as a major thrust area.

Q: The market perception is that a couple of these Gulf orders usually come in at lower margins. What could be the margin profiles with these orders?

A: We quote them at similar margin as we don't quote at lower margins. Definitely, these are more challenging jobs working in the new geography. Though we have to work hard to see that we don't erode the margins, it takes one or two jobs with the customer to realise the quoted margin.

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