The administration has informed that the loss of migrant labor in the course of the lockdown created a problem in wrapping up projects. The firm still notices potential opportunities in government buildings, data centers, healthcare infra, airports, and metro rail projects.
Larsen and Toubro Ltd (L&T), Engineering and infrastructure giant is anticipated to report a net deficit of ₹467.8 crore in the June quarter of FY21, in accordance to a Bloomberg poll of two analysts. Consolidated revenue, as per a poll of 5 analysts, is anticipated to touch ₹20,678 crore, in the period of the strictest COVID-related lockdown throughout the globe.
In Q1FY20, L&T had reported revenue worth ₹29,636 crore and net income of ₹1,473 crore.
The firm’s management has stated in the past few months the loss of migrant labor amidst the lockdown has induced a challenge in finishing up the projects. By the end of the March quarter, 90% of projects of the firm were operating with 40% labor strength.
Laid-back orders (5% of order book), interruptions in Andhra Pradesh projects, funding limitations and impact caused by COVID-19, deferment in Mumbai coastal road project, and metro project-affected execution in Maharashtra have decelerated developments in the order book, comprehensively. In Q4FY20, the firm went intentionally slow on execution to retain its working capital.
In its FY20 annual report, AM Naik- Chairman informed that he foresees improved economic activity in the second half of the present fiscal. Naik stated: “The pandemic and its fallout makes it difficult to forecast the future with certainty,” and even added that it was untimely to foretell any business consequence. Despite that, the firm still witnesses potential opportunities in water projects, expressways, government buildings, healthcare infra, hydel projects, airports, data centers, metro rail, and hydrocarbon (onshore and offshore) projects.
“While we hope the second half of 2020-21 will herald better economic and business activity in terms of tendering, good liquidity, as well as the revival of labor and supply chains, it would be premature to predict the company’s business outcomes,” Naik added in the letter given in the FY20 annual report. It pinned the impact created due to the COVID-19 lockdown on ₹1,800 crore on revenue and ₹400 crore on net profit.
At its annual general meeting, the firm will discuss a solution to raise ₹4,500 crore through diverse sources like qualified institutional placement (QIP).