Confident of timely payment from new EPC contract: LT

Engineering and construction major Larsen & Toubro (L&T) on Monday said that it has secured Rs 5,689 crore order for setting up two units of 660 megawatt thermal power project from state-owned  Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL)

Though state utilities across the country are financially stressed, SN Roy, member of the Board at L&T is confident of not facing any financial hurdles in this particular project.

In an interview to CNBC-TV18, Roy said that the government has asked central as well as state utilities to tie up funds for projects well in advance. "Since finances are tied up, we are hopeful of not facing any financial hiccups from RRVUNL." he said.

He further said that the firm will complete the project in 42 months which is commendable because none of the EPC projects in the country are executed at such a pace. The company has already deployed team for pre-commissioning activities for this project.

 For L&T, the order has come at a time when it is already in advanced execution phase of several large super-critical thermal power projects. These include complete projects being built on an EPC basis as well as boiler-turbine-generator units.

The company has advanced manufacturing plants in Hazira, Surat which are among the world's largest integrated facilities for power plant equipment. The company also has joint ventures with global leader Mitsubishi Heavy Industries, Japan for making of super-critical boilers and turbines.

Meanwhile, analyst Dhiraj Agarwal, Standard Chartered  Securities recently told CNBC-TV18 that L&T is relatively better placed than industry players  in terms of order flow and the stock is worth owning.

Sanjeev Zarbade, Analyst, Kotak Securities also told the channel that the company will maintain margins at current level and order inflow is also in-line with expectation, despite a slow economy. The firm has assigned 'accumulate; rating on the stock with a target price of Rs 1740.

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