Doha win makes us a Leading Metro Systems contractor: L&T

S.N.Subrahmanyan, Whole-time Director & Senior Executive Vice President (Construction), L&T, says the company won’t be executing the order on its own – a consortium including L&T will execute the job. This is a win on top of the Riyadh Metro which we got a few months back

L&T recently won the Rs 4500 crore Doha Metro award, making the company one of the leading contractors of metro systems in the world. S.N.Subrahmanyan, Whole-time Director & Senior Executive Vice President (Construction), L&T, says the company won’t be executing the order on its own – a consortium including L&T will execute the job. He adds that the Doha Metro project is a prestigious one and is towards the FIFA 2020 games, hence it is a part of the country’s (Qatar) development.

Below is the verbatim transcript of SN Subrahmanyan’s interview:

What would the margins be on the Doha Metro order that you have won, and with this Rs 4500 crore order what would the order book now stand at?

A: The order is a big win, it is a very prestigious order doing about 11 kms of underground metro. It is a very prestigious Qatar metro project in the city of Doha. This is towards the FIFA 2020 games and therefore to be part of country’s development – in that way is a very significant achievement from our point of view.

It is not a job which L&T does on its own, we have partners there, a consortium which will execute the job, L&T has got a significant share there and we will be looking at the consortium with some of our senior people who will go there to execute it.

This is a win on top of the Riyadh Metro which we got a few months back and as you are aware in India we are very well present in Delhi metro, in Kolkata Metro, in Bangalore Metro, Chennai Metro, Hyderabad Metro which is a huge project that we are doing. So it adds significantly to our metro portfolio and makes us probably one of the leading contractors of metro systems in the world at least. Having said that, this has been one against global competition, it is a reasonable job and if we do it well the margins that L&T normally does should be there.

What kind of an order book are you targeting for FY15?

A: As of date, March end, construction should end up with a backlog of about Rs 150,000 crore and we have just started the year so let us see how it goes. We will announce the targets when we announce the results or give guidance.

Larsen Stock Price

On April 25, 2014, Larsen and Toubro closed at Rs 1350.80, down Rs 26.5, or 1.92 percent. The 52-week high of the share was Rs 1387.85 and the 52-week low was Rs 678.10.

The company’s trailing 12-month (TTM) EPS was at Rs 51.37 per share as per the quarter ended December 2013. The stock’s price-to-earnings (P/E) ratio was 26.3. The latest book value of the company is Rs 272.53 per share. At current value, the price-to-book value of the company is 4.96.

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