When engineering conglomerate Larsen & Toubro (L&T) said on Monday that Rs 160 billion worth of orders for 2017-18 were “non-moving”, this was not the first time the company classified some of its orders under this category. Since 2013-14, L&T has classified orders totalling Rs 496.20 billion as “slow moving” or “non-moving”.
In May 2017, the company had said about Rs 180 billion worth of orders for financial year 2016-17 had been classified as slow moving. With an order book of Rs 2.63 trillion, these slow-moving orders may not impact L&T significantly, even as industry analysts say this is indicative of the overall execution stress in the sector. L&T, with its presence across various verticals, is seen as a proxy for the core economic activity in the country.
R Shankar Raman, chief financial officer for L&T, said around 80 per cent of the orders that they classified as slow moving in the past few years never fructified. “We have been largely accurate in predicting these non-moving orders,” Shankar Raman told Business Standard. Data compiled by Business Standard, based on the numbers the company shared in an email response, shows Rs 396.90 billion worth of orders may never have fructified. Read More