The construction and mining equipment business of Larsen & Toubro, India’s leading engineering, procurement and construction projects, manufacturing, defence and services conglomerate, has secured one of its biggest orders ever from Tata Steel to supply 46 units of Komatsu Mining Equipment. The order comprises of 41 units of Komatsu HD785-7 (100 Ton Dump Truck), three units of Komatsu WA900-3E0 (9 Cum Wheel Loader) and two units of Komatsu D275A-5R (410HP Crawler Dozer). The scope includes supply of equipment and full maintenance contract for 60,000 hours of equipment. Larsen & Toubro is a pioneer in the Indian construction and mining machinery industry, distributing and supplying state of the art equipment to the infrastructure, mining and irrigation sectors. Its comprehensive range of world-class equipment matches global performance standards. The business is engaged in the distribution and support of equipment such as Hydraulic Excavators, Rear Dump Trucks, Crawler Dozers, Wheel Loaders, Wheel Dozers, Motor Graders, Heavy Tippers, Surface Miners, Skid Steer Loaders. Meanwhile, the Transportation Infrastructure business of L&T Construction which is the construction arm of Larsen & Toubro, has secured a mega contract from the National High-Speed Rail Corporation Limited to construct 87.569 km of the Mumbai-Ahmedabad High Speed Rail project, popularly referred as the Bullet Train project. This order is the biggest EPC contract awarded in the country to date, involving the construction of a 237.1 km stretch. The scope of this package includes the construction of viaducts, one station, major river bridges, maintenance depots, and other auxiliary works. The approximately 508 km Mumbai-Ahmedabad High-Speed Rail project will cover 155.76 km in Maharashtra, 4.3 km in the Union Territory of Dadra & Nagar Haveli and 348.04 km in Gujarat with 12 stations along the route. Upon completion, the High-Speed Rail will operate at a speed of 320 kmph. The infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from the government for initiating policies that would ensure time-bound creation of world-class infrastructure in the country. The infrastructure sector includes power, bridges, dams, roads and urban infrastructure development.
The government is also focusing on increasing Foreign Direct Investment in the Construction Development sector (townships, housing, built up infrastructure and construction development projects). India has a requirement of investment worth US$ 777 billion in infrastructure by 2022 to have sustainable development in the country and is witnessing significant interest from international investors in the infrastructure space. The Government of India is investing highly in the infrastructure sector, mainly highways, renewable energy and urban transport and taking every possible initiative to boost the infrastructure sector. It had also announced in the Union Budget of plans to spend US$ 1.4 trillion on infrastructure in the next five years. In the Union Budget 2020-21, the Government of India has given a massive push to the infrastructure sector by allocating US$ 24.27 billion for transport infrastructure. The government has proposed investment of US$ 750 billion for railways infrastructure in the next 10 years. India and Japan have also joined hands for infrastructure development in India’s north-eastern states and are also setting up an India-Japan Coordination Forum for Development of North East to undertake strategic infrastructure projects in that region.
The Larsen & Toubro stock currently quoting at Rs 1,115 can be bought by portfolio investors for smart gains in the next one year time frame.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.