Growing Opportunities in Transmission and Distribution for L&T
Larsen & Toubro (L&T) is experiencing a remarkable surge in opportunities within the transmission and distribution sector, largely driven by the global shift towards alternative energy sources. T. Madhav Das, the company’s Senior Vice President (Utilities) and Wholetime Director, emphasized that this trend is paving the way for significant growth prospects for L&T in the near future.
International Prospects vs. Domestic Challenges
Das highlighted that while there is substantial potential in the international market for transmission and distribution, India faces several hurdles. Issues such as land acquisition difficulties and a lack of resources have hindered the implementation of projects within the country, resulting in a slower pace of progress. Despite these challenges, L&T remains optimistic that a concerted effort from the government, coupled with a heightened focus on renewable energy, will enable India to capitalize on the burgeoning clean energy sector.
Strong Order Pipeline
In an insightful discussion with Moneycontrol, Das revealed that L&T has a robust order book with 18 GW of projects in the pipeline, out of which 1.5 GW is allocated to India. This not only underscores the company’s strong position in the market but also indicates a healthy demand for its services in the transmission and distribution arena. He elaborated that the project completion rate in India stands between 15 to 20 percent, while it is significantly higher in the Middle Eastern countries. This discrepancy underscores the challenges faced in India compared to more developed regions.
Addressing Bottlenecks and Strategic Growth
Das also addressed the bottlenecks currently affecting transmission and distribution projects. Recognizing the need for a dedicated focus, L&T has established a separate vertical for renewable engineering, procurement, and construction (EPC) division. This strategic move aims to streamline operations and enhance efficiency within the rapidly evolving renewable landscape.
The Shift in Renewable Energy Landscape
When asked about the progress of transmission and distribution work in India, Das noted that until 2015-16, the pace of renewable project implementation was relatively slow, with only 5 to 6 GW of capacity added annually across the nation. However, recent developments indicate a significant shift. India is now witnessing the emergence of mega solar parks, with large-scale installations prominently in Rajasthan and Gujarat. This shift reflects the growing commitment of both the government and private sectors towards fostering renewable energy growth.
| Key Factors for Growth | Challenges Faced | Company Actions |
|---|---|---|
| Global shift towards renewable energy | Land acquisition issues | Separate vertical for renewable EPC |
| Robust order pipeline (18 GW) | Lack of resources | Strategic government interventions |
| Emergence of mega solar parks | Slow project completion rates | Increased focus on Clean Energy |
In conclusion, L&T’s position in the transmission and distribution segment is characterized by a strong order book and promising growth prospects. By overcoming domestic challenges and leveraging international opportunities, the company is well poised to contribute significantly to India’s renewable energy landscape.
