Larsen and Toubro Limited
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BSE Code:
500510
NSE Code:
LT
Business Profile
Business Profile
Larsen & Toubro (LNT) is one of the largest technology, engineering, construction and manufacturing companies in India. Founded in 1938, it went public in December 1950. The company has formed a group consisting of 79 subsidiary companies, 22 associate companies and 14 joint ventures in the sectors of information technology, financial products and services, engineering and project management, infrastructure development projects and services, manufacturing of industrial equipment, machinery and products. Associate companies include L&T-Chiyoda, L&T-Ramboll Consulting Engineers, Feedback Ventures, Voith Paper Technology (India), Salzer Cables, Audco India, L&T-Komatsu, L&T-Case Equipment, and Ewac Alloys.
The ISO 9001:2000 and OHSAS 18001 certified company operates through various divisions. Engineering & Construction Projects (E&C) offers vertically integrated services with additional interests in information technology and electrical business in the oil and gas, petrochemical refineries, fertilizer and power. The division focuses on the GCC countries for procuring EPC/turnkey and electro-mechanical construction contracts.
Heavy Engineering (HED) manufactures and supplies modular precision, custom-engineered, critical equipment and systems including integration and testing of weapon systems, sensors and engineering systems to core sector industries worldwide from its facilities at Mumbai and Talegaon in Maharashtra, Hazira and Vadodara in Gujarat, Visakhapatnam in Andhra Pradesh, Talegoan and Sohar in Oman. A strategic electronics center for electronic systems design and engineering operates from Bangalore and a warship and submarine design center has also been set up.
Engineering Construction & Contracts (ECC) offers turnkey construction services from concept to commissioning. Engineering, procurement and construction solutions are offered for specific projects. Functional restructuring into four separate units has been effected since July 1, 2008. It has executed projects in countries like Oman, Qatar, Saudi Arabia, Kuwait, UAE, and Malaysia in areas such as oil and gas, hydrocarbon, power and fertilizers.
Electrical & Electronics (EBG) manufactures and markets switchgear, MCCB, ACBs, switch boards, energy meters, petrol dispensing pumps and electronic control and automation systems, medical equipment and tooling solutions and new product such as advanced vital sign transport monitors for domestic and export markets. The division operates from Mumbai, Navi Mumbai, Ahmednagar, Coimbatore and Mysore in India, Wuxi in China and Dammam in Saudi Arabia. In FY08, the company acquired TAMCO Corporate Holdings Malaysia and its three international subsidiary companies to enhance its MV switchgear products portfolio even as the brand is already established in 30 countries including the Middle East.
Machinery & Industrial Products (MIPD) is organized into the business sectors of machinery and industrial products and offers equipment for construction and mining, material handling, crushing, hydraulics, paper, welding, castings, processing rubber and plastics. It provides valves, windmill components, cutting tools, engineered tools, and fuel dispensers. During the year, the Kanshahal works expanded the foundry to double capacity from 6,000 TPA to 12,000 TPA at a cost of Rs 150 million. It participated in Frost & Sullivan Manufacturing Excellence Award 2007 and qualified for Gold category.
Information Technology & Engineering Services Technology Services comprises of two business units - e-Engineering Solutions (e-ES) providing solutions to high-end technology verticals such as automotive, aerospace, marine and ship design, plant engineering and industrial products; and Embedded Systems (EmSyS) providing embedded systems for electronics product design and development. Today, the business units have a dedicated team of over 2,400 professionals operating from Vadodara, Mysore, Bangalore and Mumbai.
Apart from a strong domestic market player, the company has an international presence with a global spread of offices and joint ventures with world leaders. International business over the last few years has seen overseas earnings growing to 18% of total revenue. Major business enterprises in the form of subsidiaries include L&T Finance, India Infrastructure Developers, L&T-Sargent & Lundy, Larsen & Toubro International FZE, L&T Power Projects, International Seaport Dredging, L&T Infrastructure Finance Company, L&T-Valdel Engineering, L&T Power Development, L&T Infra & Property Development, L&T Concrete, L&T Shipbuilding, L&T Strategic Management, L&T-Gulf, L&T Transco, Hi-Tech Rock Products & Aggregates, Larsen & Toubro Infotech, L&T Infotech GmbH (Germany), Larsen & Toubro Information Technology Canada, GDA Technologies Inc, L&T-Valdel Engineering, Spectrum Infotech, International Seaport Dredging, L&T Infrastructure Development Projects, Tractor Engineers, Larsen & Toubro International FZE and several step-down subsidiaries and joint ventures.
The registered office is located at L&T House, Ballard Estate, Mumbai-400001.
Financials
Larsen & Toubro registered a 33.33% growth in net profits to Rs 5,024.4 million for the quarter ended June 2008 from a profit of Rs 3,768.5 million for the quarter ended June 2007.
Net sales rose 53.19% to Rs 69,014.3 million for the quarter ended June 2008 from Rs 45,052.1 million for the quarter ended June 2007.
Total income rose 50.6% to Rs 71,032.6 million for the quarter ended June 2008 from Rs 47,166.8 million for the quarter ended June 2007.
The earnings per share (EPS) of the company stood at Rs 17.19 for the quarter ended June 2008.
Recent Developments
04-SEP-08
The company is planning to foray into new construction segments including solar power and underground structure. The construction division of the company is also planning to recruit 3,000 to 5,000 people including freshers in the next few years. The construction division project order is growing at 30%-35% year on year. The current order book size is about Rs 360 billion, which will be executed in the next two years.
26-AUG-08
The company has set up a science laboratory at Milind Viyalay, Mumbai as part of Project Ujjwal. About 2,000 students of the school would be able to use the laboratory.
20-AUG-08
The company is likely to acquire equity stake in coal mines in Australia and Indonesia. Picking up a stake in coal mines is part of L&T`s strategy to increase its focus on the power sector. Apart from tying up with Mitsubishi Heavy Industries for manufacturing super-critical boilers, turbines and generators, L&T also plans to set up power plants on its own, including bidding for ultra-mega power projects, or pick up equity stake in projects being set up by others. In the next two years, L&T is planning to have 4,000 - 6,000 MW of power plants under development. The firm has set up two subsidiaries ??? L&T Power Projects, which will invest in power projects, and L&T Power Development, which will set up power plants.The company is also bidding for ultra-mega power projects and is in negotiation with other companies that are putting up power projects for a possible equity stake. Besides, it is also talking to Tata Power, Videocon, Adani and Torrent Power for equipment supply and for project work. Except Torrent Power`s project, which is an expansion of an existing gas-based power project, all others are coal-based projects. The L&T-Mitsubishi joint venture will also submit bids for nine plants of 660 MW each being put up by NTPC, the country`s largest power utility.
12-AUG-08
L&T in consortium with Outotec, GmbH of Germany for pellet plant and Paul Wurth, Italia for blast furnace has bagged EPC orders valuing at Rs 25.45 billion from Tata Steel for 6 million TPA pellet plant and a 3,800 cubic meter, 2.5 million TPA blast furnace at Jamshedpur. L&T`s portion is valued at Rs 15.78 billion. The pellet plant is scheduled for commissioning in 33 months. The blast furnace is scheduled for commissioning in 30 months. L&T-Paul Wurth Consortium had earlier commissioned India`s largest blast furnace at Jamshedpur on May 31, 2008. The blast furnace project included design, manufacture, supply, erection, commissioning of the furnace with auxiliary facilities on a turnkey basis. L&T-Outotec has also bagged a Rs 7.53 billion order on EPC basis for 360 sq. m. sinter plant, scheduled for commissioning in 30 months, for SAIL-RSP expansion of 3.7 million TPA. L&T`s portion is valued at Rs 5.88 billion. With this order, L&T-Outotec is executing six sinter plants on EPC basis in India and has established itself as the most preferred supplier in the steel industry. L&T has bagged a repeat order from Hindustan Zinc for 0.21 million TPA leaching, purification and zinc electrolysis plant on EPC basis valued at Rs 5.18 billion, scheduled for commissioning in 17 months.
16-JUL-08
Larsen & Toubro (L&T) plans to form a Rs 20 billion forging venture with Nuclear Power Corporation of India (NPCIL). NPCIL is in negotiations with L&T for the last few months to set up a new venture as India is seeking to import nuclear technology and fuel. A consortium of Larsen and Toubro (L&T) with Malaysian firm Scomi and another consisting of Reliance Infrastructure with Japanese firm Hitachi have submitted their financial and technical bids to construct the country`s first monorail corridor in Mumbai. The two consortia have submitted their bids to the Mumbai Metropolitan Region Development Authority (MMRDA). The monorail corridor is expected to be ready by 2011. The elevated monorail corridor, 20 km in length, will be from Jacob Circle in central Mumbai to Chembur in northeast Mumbai.
Railways firm RITES, which has been the consultant for the project, will be assisting the MMRDA in scrutinizing the two bids.
08-JUL-08
Larsen & Toubro (L&T), India`s leading engineering, technology and construction company, has bagged a Rs 10.48 billion order from the Indian Railways for setting up a cast steel wheel manufacturing plant in the Saran (Chhapra) district of Bihar. The plant when commissioned will have capacity to manufacture 100,000 cast steel railroad wheels per annum. The scope of work for this turnkey project involves engineering, procurement and construction of the complete plant including civil works, electrical installation, design, supply erection and commissioning of machinery and plant.
07-JUL-08
Infrastructure major Larsen & Toubro has decided to split its engineering construction and contracts (ECC) division to increase efficiency in managing growth as seen by the sharp jump in business in recent years. It has decided to split the ECC division`s functional areas into four companies. ECC will be the holding company for it. The functional restructuring has been effected since July 1, 2008 and the four divisions have began work independently.
04-JUL-08
The company is in discussion with a consortium of international banks, including home grown ICICI Bank and State Bank of India (SBI), to fund four power projects, each having a capacity of over 1000 mega watts. L&T is planning to invest Rs 250 billion in the next five years in setting up power projects and has recently formed two subsidiaries - L&T Power Projects as the investment vehicle for power projects and L&T Power Development to set up power plants. It is also said that the company is in talks with consumer electronics major Videocon Industries to set up a 1000 MW coal fired power project in Gujarat for over Rs 45 billion.
30-JUN-08
The company has received Rs 15.57 billion order for the steam turbine generator package of 2 x 800 MW for Damodaran Sanjeevaiah Thermal Power Station at Krishnapatnam, Andhra Pradesh. This project is being developed by Andhra Pradesh Power Development Company (APPDCL). This is the first order for supercritical 800 MW steam turbine generator island with auxiliaries in the country.
28-JUN-08
The company has bagged High-Tech Equipment Orders in excess of Rs 10 billion within 2 months of first quarter 2008-09.The company is expanding its manufacturing facilities at Hazira in Gujarat. It is also setting up a new facility at Oman, to cater to the rising demand.
Major local contracts include a large order for power plant equipment from Coastal Gujarat Power and another contract from HPCL Mittal Energy, Bathinda (HMEL) for critical reactors
07-MAY-08
Larsen & Toubro`s has sold its 51% stake in HPL Cogeneration (HPLCL) to Haldia Petrochemicals (HPL) for Rs 1.80 billion.
HPLCL is the joint venture for captive power supply between L&T and HPL.
22-APR-08
Larsen & Toubro (L&T) and Tamil Nadu Industrial Development Corporation (TIDCO) have signed a joint venture agreement to set up an integrated Shipyard Complex of global standards with a port facility and a total investment of about Rs 30 billion in the Kattupalli village, near Ennore in Tiruvallur District of Tamil Nadu.
03-APR-08
The electrical & electronics division (EBG) of Larsen & Toubro (L&T) filed over a hundred patent applications on its range of electrical and electronics products for 2007-08.
18-MAR-08
The Heavy Engineering Division of India`s largest engineering company Larsen & Toubro (L&T) bagged a contract valued at Euro 28 million (Rs 1.70 billion) for supply of the Coal Gasifier and Syngas Cooler assembly to Hebi Coal and Electricity Co.
Future Plans
The company is bidding for a number of jobs in China, Argentina, the Middle East Countries, CIS countries, and Malaysia. Joint venture companies formed in many of these countries are participating in many tenders.
In FY08, a memorandum of understanding was signed with the Tamil Nadu Industrial Development Corporation for commencing the new shipyard project at Kattupalli in Tamil Nadu under a joint venture arrangement with TIDCO. The company plans to build large ships of upto 300,000 DWT and expects to sail out its first ship from this venture in 24 to 30 months time.
The heavy engineering division is in the process of setting up a precision manufacturing facility at Coimbatore in Tamil Nadu to serve the needs of aerospace, aviation, nuclear power and sub-systems for missiles.
In order to consolidate its dominant position in the market and to cater to the growing demand of cast components for wind turbines, a new green field foundry is being set up at Coimbatore.
The company has decided to split its engineering construction and contracts (ECC) division. The functional areas will be split into four companies and ECC will be the holding company. It plans to take these four companies of the ECC division to the public in the next two to three years after attaining a critical mass (read revenue) of USD 1 to 1.5 billion each.