L&T President Sarma Suggests Considering China Ties Subject to Strict Guidelines
Larsen & Toubro (L&T) Keeps Door Open for Chinese Collaborations Under Amended Press Note 3 Norms
Key Highlights
- Larsen & Toubro (L&T) is open to potential collaborations with Chinese companies under the amended Press Note 3 norms.
- Competitiveness will be a key factor in deciding future partnerships, particularly in large-scale energy transition projects.
- Collaborations, if pursued, could help bring down costs and sharpen L&T's competitive positioning in global bids.
Recent Developments
The central government recently relaxed foreign direct investment (FDI) rules under Press Note 3, introducing a definition of "beneficial ownership" and allowing investments where investors from land-bordering countries hold up to 10% non-controlling ownership to proceed under the automatic route. This relaxation specifically targets manufacturing inputs for solar (polysilicon, wafers), capital goods, and electronic components.
Impact on L&T
L&T is currently executing its Lakshya 2026 five-year plan, which targets value-accretive growth with a heavy focus on Sustainability (ESG) and aims for 15% revenue growth and 10% growth in order inflows by FY26. Under the plan, a key pillar is pivoting from traditional hydrocarbons toward green energy, data centres, and semiconductors.
Investor Takeaway
L&T may consider collaborations with Chinese companies for energy transition projects if it maintains competitiveness.
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