New Delhi: With its first-quarter profits dipping by a sharp 37 percent, industrial giant Larsen and Toubro on Friday blamed "unhurried pace of reforms" and the global uncertainties for a subdued investment climate in the country.
"The domestic infrastructure sector awaits the translation of various policy and budgetary initiatives into a definitive capital expenditure programme.
"While visibility of outlay by public sector/government undertakings has improved, private sector investment in the industrial sector is constrained by weak demand, low commodity prices and under utilisation of existing capacities," L&T said.
Hoping for favourable macroeconomic conditions going ahead, L&T said the latest quarter, ended June 30, witnessed improving macroeconomic trends and favourable conditions for containment of fiscal deficit and monetary policy management are expected to enthuse an investment friendly environment.
"The investment climate, however, remained subdued in the backdrop of global uncertainties and unhurried pace of reforms in India," L&T said, while announcing its first quarter results.
Voices are emerging from various quarters, including from the corporates and the analysts, that call for an urgent need to quicken the pace of reforms.
Global giant Moody's also said yesterday that the delay in key reforms is denting business confidence and the foreign investors are wary of investing in India.
While pegging India's true growth potential at near 10 percent, Moody's also warned that "GDP growth is not likely to rise above 7.5 percent if the government continues to over-promise and not deliver".
"The business environment stays challenging in the short term while the prospects in urban infra, transportation infra, power transmission, water, renewable energy and defence manufacturing remain promising in the medium term," L&T said.
The company said it hopes to benefit from the growth opportunities as they emerge.
L&T reported a steep fall of 37.3 percent in consolidated net profit to Rs 606.19 crore for the first quarter of fiscal 2015-16 on slower execution of some projects and higher expenses.
L&T is an Indian conglomerate, engaged in technology, engineering, construction, manufacturing and financial services with over USD 15 billion in annual revenue. It operates in 30 countries.
The company's stock closed at Rs 1,789.55, up 0.75 percent, on the BSE.