Larsen may face order slowdown next year

Written by Bloomberg | Updated: Mar 1 2009, 04:33am hrs
Larsen & Toubro Ltd, India's biggest engineering company, expects orders to slow in the next financial year as weakening economic growth delays investments in roads, bridges, ports and factories.

The company, aiming to achieve 30% sales growth this year, is facing a slowdown in its parts-making business, president operations JP Nayak told reporters in New Delhi on Friday. Sales in the year ending March 31, 2010, will probably grow at the same pace as this year, he said.

India's economy grew at 5.3% in the quarter ended December 31, the slowest pace since the last quarter of 2003. Commercial banks have been slow to reduce their lending rates in response to the central bank's rate cut and the global recession has caused exports to decline for the first time in seven years.

Manufacturing contracted 0.2% and agriculture shrank 2.2% in the last quarter, the statistics agency said in New Delhi on Friday.Larsen shares, which fell as much 1.9% to Rs 598.25, the lowest since August 31, 2006, traded at Rs 607.2 in Mumbai.