L&T expects defence biz to make a splash this fiscal

Mumbai: Larsen & Toubro's defence unit, a fledgling business which has witnessed much delay in getting big ticket orders thus far, will contribute significantly to the parent company's order growth in 2017-18 and start contributing over Rs 1,000 crore to the revenue in the following year, the head of the division told ET.

The company is hopeful that the government would finalise at least six orders worth Rs 40,000 crore in the current fiscal where it is participating and hopes to win a substantial share of it.

“So far defence has been a very small business but in FY18, it will start contributing to the consolidated order book. Revenue and profit will start coming only in the next year when we start delivering. Our first order itself will give us revenue of around Rs 1,000 crore every year for around four years,“ said Jayant Patil, head of defence and aerospace at L&T.

Earlier this month, L&T bagged its biggest defence order worth Rs 4,500 crore from the ministry of defence to supply gun systems to Indian Army . It will supply 100 units of 155mm 52 calibre Tracked Self-Propelled Gun systems to army , in collaboration with South Korean technology partner Hanwha Techwin. Patil said that this order was delayed by over six months but now, the work done under former Defence Minister Manohar Parrikar is reaching conclusion, making the order pipeline look robust.

“In the current financial year, in an absolute optimistic scenario, we expect at least six programmes worth Rs 40,000 crore, in which we are participating, will be finalised. We may not win all of them but we are hopeful to get a sizable amount. Even if we win one-third of it, we will be good,“ Patil said.

“There is a significant change in government's attitude and pace. Even though there performance has been far superior to the previous government, we are all impatient and want them to act even faster which is not happening,“ Patil said.