© L&T is India’s premier engineering and construction (E&C) conglomerate serving entire capex cycle in infrastructure and industrial projects. E&C caters to infrastructure, power, oil & gas, roads, ports and irrigation projects, offering total turnkey EPC services. L&T is well entrenched to benefit from investment taking place in all these segments.
© Company has entered into JVs with leading global players to offer EPC services for power plants (Sargent & Lundy), hydrocarbon (Chiyoda), and barges / sub-sea pipe laying (Sapura Crest Petroleum). Company is gearing up to enhance its business canvas further by getting into areas like ship building, coal mining, aviation, nuclear, power generation, water treatment and defense, which have immense potential.
© Order backlog at Rs 51,000 crore as on Mar. 31, 2008 (~ 2 times FY 2008 sales) continues to give strong visibility for the near future. Order book split indicates increasing shift to non-construction projects, which should yield better margins in future. Besides, business portfolios of subsidiaries (including in IT and several SPVs implementing / managing BOOT type projects) will provide additional leg-up with consolidated earnings growing at a faster pace. Even on stand-alone basis, L&T to sustain growth @ CAGR of 25% in near to medium term.
© L&T’s subsidiaries will provide unlocking of value thru public offering, as it plans to list its Infotech subsidiary, L&T Infrastructure Development Projects (IDPL) and its financial services business by FY 2010.
© L&T has suffered a loss of ~ Rs 200 crore on account of hedging contracts in metals entered into by its wholly owned UAE subsidiary in FY 2008. However, management has clarified that loss of subsidiary would be offset by higher profitability in the parent company due to subdued prices of some commodities. Despite this adverse development, company is maintaining its guidance for growth in order booking and would see improvement in EBIDTA margin.
© L&T’s property development division will develop Integrated Commercial Complex at Seawoods railway station, Navi Mumbai over 40 acres of land at project cost of Rs 3,500 crore. Project has potential to develop 4- 5 Million Sq. ft. of usable space. Development will consist of modern railway station, large format retail and entertainment space, multiplexes, office complex, premium category hotel and service apartments. It will also develop state-of-art Seawoods-Darave Railway station over next three years.
© L&T and Tamil Nadu Industrial Development Corporation Ltd (TIDCO) have signed joint venture agreement to set up an integrated Shipyard Complex of global standards with port facility and total investment of about Rs 3,000 crore near Ennore in Tamil Nadu. Proposed Shipyard complex will include facilities for commercial ship building including very large Cargo carriers, specialized cargo ships for liquid / gas transportation and cruise vessels. It will also have capability to build vessels for Defence sector, off-shore platforms & floating production cum storage facilities for the Oil & Gas sector.
© As a part of its plan to exit from non-core businesses, L&T has sold its ready mix concrete business to Lafarge SA for Rs. 1,480 crore. Company plans to utilize this sum for expanding shipping, power and infrastructure projects. It has also decided to transfer the medical equipment and systems business to a subsidiary or to sell it off.
For FY 2008, company has reported superb performance. Standalone sales grew @ 41.5% to Rs. 24,855 crore (Rs. 17,567 crore). Further aided by notable improvement in OPM% to 11.3% (9.9%) despite rising material costs and higher extra ordinary income of Rs. 87.23 crore (Rs. 22.88 crore), PAT shot up by 54.9% to Rs. 2173 crore (Rs. 1403 crore). In view of excellent result, L&T has also declared 1:1 bonus. Company expects robust business momentum to continue even in FY 2009 with revenue growth of 30-35% and stable margin.
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