REBUILDING INDIA'S INFRASTRUCTURE

Global Finance, Oct 2007 by Platt, Gordon

COMPANY TO WATCH: LARSEN & TOUBRO/INDIA

Engineering and construction conglomerate Larsen & Toubro, one of India's largest listed companies, has evolved into a multinational corporation with offices in 30 countries, a growing order book in the Middle East, and manufacturing operations in China, to say nothing of its information technology, power, medical electronics and agricultural operations.

Despite its diverse businesses, the Mumbai-based company is about as pure a play as an investor can get on opportunities arising as India rebuilds its crumbling infrastructure. Larsen & Toubro is modernizing Delhi International Airport, building power plants and searching for a suitable site to set up a worldclass facility for shipbuilding and repair. It needs about 1,000 acres alongside deep ocean waters for the type of shipyard it plans in order to build a variety of defense and specialized ships, including aircraft carriers and submarines.

The company's engineering and construction division is a major participant in the oil and gas sector and in process industries such as cement, metals and mining. It says the public-private partnership (PPP) model will be the preferred method for infrastructure projects in India, which will need to spend an estimated $370 billion in this area in the next five years. -GP