57
Larsen & Toubro Investor Presentation – H1 FY16 October 30, 2015
Larsen & Toubro
Investor Presentation – H1 FY16October 30, 2015
Disclaimer
This presentation contains certain forward looking statements concerning L&T’s future
business prospects and business profitability, which are subject to a number of risks
and uncertainties and the actual results could materially differ from those in such
forward looking statements.
The risks and uncertainties relating to these statements include, but are not limited to,
risks and uncertainties regarding fluctuations in earnings, our ability to manage growth,
competition (both domestic and international), economic growth in India and the
target countries for exports, ability to attract and retain highly skilled professionals,
time and cost over runs on contracts, our ability to manage our international
operations, government policies and actions with respect to investments, fiscal
deficits, regulations, etc., interest and other fiscal costs generally prevailing in the
economy. Past performance may not be indicative of future performance.
The company does not undertake to make any announcement in case any of these
forward looking statements become materially incorrect in future or update any
forward looking statements made from time to time by or on behalf of the company.2
3
Presentation Outline
L&T Overview
Business Overview
Group Performance
SectoralOpportunities
& Outlook
4
Presentation Outline
L&T Overview
Business Overview
Group Performance
SectoralOpportunities
& Outlook
L&T - At a Glance
Professionally Managed Company
FY 15 Group Revenues: `920 Bn
(approx.
US$ 15 Bn)
Market Cap (30th Oct’15):
₹1313 Bn
(approx.
US$ 20 Bn)
Credit Ratings CRISIL:
AAA/Stable ICRA:
AAA(Stable)
5
India’s largest E&C company with interests in Projects, Infrastructure
Development, Manufacturing, IT & Financial Services
6
L&T - At a Glance
L&T – Shareholding Pattern
Listed with BSE & NSE
GDRs listed with LSE and LuxSE
L&T is one of the most widely held listed companies in India
No promoter holding
Uninterrupted Dividend payment record since 1946; FY15 Dividend of Rs. 16.25 per share (FY14:
Rs. 14.25 per share)
Major Institutional Shareholders % Shares
Life Insurance Corporation of India 16.5%
Administrator of the SUUTI 8.2%
HDFC Trustee Company Limited 2.2%
General Insurance Corp. of India 1.9%
Government of Singapore 1.5%
ICICI Prudential Life Insurance 1.2%
Abu Dhabi Investment Authority 1.0%
7
Govt. Financial
Institutions & Insurance Companies,
29%
FII’s & GDR, 21%
Individuals,22%
L&T Employee Welfare
Foundation,12%
Mutual Funds & Pvt.
Insurance Cos., 13%
Others,3%
30th Sep
2015
Experienced Management Team
8
A M Naik
Group Executive Chairman
BE [Mech]
Joined L&T in March 1965
Diverse and vast experience in general management, Technology and E&C
S. N. Subrahmanyan
Deputy Managing Director & President
B.SC ENGG (CIVIL), MBA (Finance)
Joined L&T in November 1984
Vast experience in Design & Build (D&B) Contracts, PPP Projects, Engineering and Construction Industry
R Shankar Raman
Whole-time Director &Chief Financial Officer
B.Com, ACA, CWA
Joined L&T Group in November 1994
Vast experience in Finance, Taxation, Insurance, Risk Management, Legal and Investor Relations
Shailendra Roy
Whole-time Director & Sr. Executive Vice President (Power, Heavy Engg. & Defence)
BE (Tech)
Joined L&T in 2004
Vast experience in Thermal Power Business
D. K. Sen
Whole-time Director & Sr. Executive Vice President (Infrastructure)
B.SC ENGG (CIVIL), MBA (Finance)
Joined L&T in 1989
Vast experience in Design & Engineering, Business Development, Tendering and construction.
Corporate Governance
9
Four-tier Governance Structure
L&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability
Board
of Directors
Executive Management Committee (EMC)
Independent Company (IC) Board
Strategic Business Group (SBG) / Business Unit (BU)
Journey Towards Excellence
10
Divested non - core business (Cement, Tractor, Glass, RMC, PDP, Medical)
Capacity expansion & TAMCO acquisition
Entry into new ventures (MHI JVs, Shipbuilding, Forging)
Tie-up with tech majors in defence and nuclear power
Foray into power generation
Listing of Financial Services
Significant ramp up of Concessions Business
Expansion of IT & Engg. Services business
Reorganisation into ICs
Acquisition of 100% ownership in Audco / L&T Komatsu / EWAC Alloys
Demerged Hydrocarbon & Integrated Engg. Service businesses into separate wholly owned subsidiaries
Restructuring for Value Creation (2000-14)
Entered into IT, Financial services and Infrastructure Concessions business
Entered into Engineering JVs with technology majors
Emerged as India’s largest integrated E&C company
Expansion through internationalisation
Developed road map for portfolio restructuring
Expansion & Consolidation
(1990-2000)
Emerged as leading & acclaimed engineering contractors
Commenced production of tractor undercarriages, valves, welding components, earth-moving equipment and cement
Established fabrication facility and yard on the waterfront at Hazira for Hydrocarbon business
Seeds of Growth (1960-90)
1938: Formed as a partnership
1952: Listed on BSE
Commenced trading & making dairy equipment, fabrication serv., war-time ship repair
Entered construction business thro’ acquisition of ECC
Started switchgear business
The Beginnings
(1938-60)
L&T’s Sustainability InitiativeThe L&T Sustainability Report 2014 is a ‘GRI Checked’ , Externally Assured, Application Level A+ report.
Climate Change Carbon footprint
mapping
Energy Conservation
Water Conservation
Material Management
Community
Sustainability Thrust Areas
Safety
Accolades
One of the eight Indian
companies featuring in Dow
Jones Sustainability
Emerging Markets Indices
One of the only five Indian
Companies to feature in the
Global ‘A’ list for its Carbon
Performance – CDP 2014
Ranked Asia’s 2nd Most
Sustainable Company in
Industrial Sector in Channel
NewsAsia’s Sustainability
Rankings 2014
L&T Ranks In Top 10
Companies for CSR – The
Economic Times
Sustainability – Environment & Social
12
Green Buildings
L&T’s own – 2.1 million sq. ft.
Constructed for Clients – 43.02 million sq. ft.
All 28 L&T Campuses are zero wastewater discharge
5 Campuses are water positive
2012-13 2013-14
1,6
1,4
67
2,0
7,3
68
Energy Conservation (GJ)
Renewable power contributes 7.9 % of indirect energy
Food waste processing plants for
treatment of organic waste
Aligned with
National Action Plan on Climate Change
and
UN Millennium Development Goals
Thrust Areas No. of Beneficiaries (2013-14)
Education 242,024
Skill Building 45,209
Healthcare-Mother and Child
517,837
Total 805,070
Education - Over two lakh children impacted
Skill Building - 8 construction skills training institutes empowering more than 13,000 people
Healthcare: Mother & Child - 8 community health centres provide state-of-the-art diagnostic health
services
Parameter Values
Energy Consumption(GJ/Employee)
132.82
Direct GHG Emissions (Tons/Employee)
7.80
Water Consumption(m3/employee)
155.81
13
Presentation Outline
L&T Overview
Business Overview
Group Performance
SectoralOpportunities
& Outlook
Builders to the nation
14
Wankhede Stadium, Mumbai
Baha’i Temple, Delhi
Maruti Manesar (Haryana) Expansion 88m Rail Bridge Jammu Udhampur1320 MT FCC Regenerator – for RIL
Oil & Gas Offshore PlatformsMumbai International Airport 3rd Narmada High
ITC Grand Chola Hotel, Chennai Sri Sathya sai Whitefield Hospital Srinagar Hydro Electric Plant
2x384 MW CCPP, Vemagiri, A.P. Transmission Lines in Himachal Water Treatment Plant, Barmer300 mtr Minerva Tower, Mumbai
Kakrapar Nuclear Power Plant, Guj
International Footprint – Marquee Jobs
15
NMC Speciality hospital, Abu Dhabi
Bhukara Hotel, Uzbeckistan
Stadium at Barbados Glorei (Commercial Space), MuscatSalalah Airport, Oman
Sabah, Malaysia
Sheikh Khalifa Interchange, UAE Coal Gasifier for China Transmission Lines, Al Majlis, Oman
1500 MT Tubular Reactor for Kuwait Bi-metallic Urea Stripper for Saudi MV Switchgear Factory, MalaysiaWater Treatment Plant, Doha
Punatsangchhu HEP, Bhutan
World’s Longest Conveyer, Bangladesh Bulk Cement Terminal, Colombo
E&C Delivery Platform
16Single point responsibility for turnkey solutions
Design
&
Engineering
Manufacture
&
Fabrication
EPC Projects
Construction
One of Asia’s largest vertically integrated E&C Companies
Quality Customer Mix
17
MIALIndian Coastguard
Multiple Alliances & Joint Ventures
18
Alliances
Pre qualifications
Note: Some of these are project specific alliances & pre qualifications
Joint Ventures
Befula Investments
L&T’s Business StructureLARSEN & TOUBRO LTD.
BUSINESS VERTICALSSUBSIDIARIES &
ASSOCIATES
BUILDINGS & FACTORIES
TRANSPORTATION INFRASTRUCTURE
METALLURGICAL & MATERIAL HANDLING
POWER T&D
HEAVY ENGINEERING
SHIPBUILDING
ELECTRICAL & AUTOMATION
POWER
FINANCIAL SERVICES
IT & TECHNOLOGY SERVICES
INFRASTRUCTURE SPVs (BOTs)
MHPS JVs (Boilers & Turbine Mfg.)
HEAVY CIVIL INFRASTRUCTURE
WATER, SMART WORLD & COMM.
OTHER MANUFACTURING & FABRICATION SUBSIDIARIES
SERVICES AND OTHER SUBSIDIARIES & ASSOCIATES
19
L&T HYDROCARBON ENGINEERING
20
Presentation Outline
L&T Overview
Business Overview
Group Performance
SectoralOpportunities
& Outlook
FY 12 FY 13 FY 14 FY 15
88.8
99.3 107.3
EBITDA
Four Year Performance
21
`B
illi
on
FY 12 FY 13 FY 14 FY 15
643 745
851
Net Sales
`B
illi
on
`B
illi
on
FY 12 FY 13 FY 14 FY 15
1,450 1,648
1,815
Order Book
`B
illi
on
920
2,327113.4
FY 12 FY 13 FY 14 FY 15
1,554
793
Order Inflow
`B
illi
on
1272
1029
`B
illi
on
22
Performance Highlights
Order Inflows
Revenues
Order Book
EBITDA Margins
Profit after Tax
Q2 H1
28%
9%11%
14%
16%
14%
25%
88bps5
bps
12%
YoY
Sep'14 Sep'15
Order Book
2144
2441
Group level Order Inflow & Order Book
23
Amount in ` Bn
14%
Order Inflow Order Book
65%72%
35% 28%
Geographical Breakup
Domestic International
Investment momentum in domestic market yet to gather pace
Excess capacity restrains industrial capex and private sector investment
Middle East Capex witnessing slowdown due to low oil prices
International business powered mainly by Infra segment
H1
FY16
FY15 FY16
334 264
398
286
Order Inflow
Q1 Q2
-25%
732
550
Group Performance – Sales & Costs
24
Infra, Power and Services businesses contribute to Revenue growth
MCO charge in line with level of operations
Staff cost increase due to manpower augmentation, normal revisions and increased
level of international operations
Increase in SGA expenses reflects higher business development expenses and warranty
provisions
Q2 FY15 Q2 FY16 % Change ` Billion H1 FY15 H1 FY16 %
Change FY15
211.59 233.93 11%Net Sales / Revenue from
Operations 401.34 436.45 9% 920.05
64.21 76.58 19% ----International Sales 112.71 142.66 27% 259.26
30% 33% 3% % of Sales 28% 33% 5% 28%
153.69 169.96 11% Mfg, Cons. & Opex (MCO) 286.95 314.76 10% 672.55
22.62 24.33 8% Staff Costs 40.20 45.32 13% 79.98
11.94 13.72 15% Sales, adm. & other Exp. (SGA) 25.78 27.55 7% 54.17
188.25 208.02 10% Total Opex 352.93 387.64 10% 806.71
Performance Summary – Operational Costs & Profitability
Material cost,
42.4%(37.0%)
Subcontracting
charges,15.6%
(16.4%)
Other
Opex, 14.7%(19.2%)
Staff Costs,
10.4%(10.7%)
Sales, adm. &
other Exp., 5.9%(5.6%)
EBITDA,
11.1%(11.0%)
Q2 FY16
25
Material cost,
36.5%(34.1%)
Subcontracting
charges,17.8%
(18.0%)
Other
Opex, 17.8%(19.4%)
Staff Costs,
10.4%(10.0%)
Sales, adm. &
other Exp., 6.3%(6.4%)
EBITDA,
11.2%(12.1%)
H1 FY16
Figures in brackets indicate corresponding period of the Previous Year
Group Performance Summary Extracts
26
Composite margins holding steady
Increase in interest expenses due to decline in G-Sec rates and operationalization of 3
road SPVs
Increase in depreciation charge due to revisions under Companies Act and
operationalization of road SPVs
Other income mainly comprises treasury gains
Q2 FY15 Q2 FY16 % Change ` Billion H1 FY15 H1 FY16 %
Change FY15
23.34 25.92 11% EBITDA 48.41 48.82 1% 113.33
11.03% 11.08% 0.1% EBITDA Margin 12.1% 11.2% -0.9% 12.3%
(6.91) (8.28) 20% Interest Expenses (14.61) (15.35) 5% (28.51)
(5.49) (6.94) 26% Depreciation (13.56) (13.16) -3% (26.23)
2.15 2.19 2% Other Income 4.92 4.76 -3% 10.10
(4.69) (4.94) 5% Provision for Taxes (9.18) (10.39) 13% (22.53)
8.62 9.96 16% PAT after Minority Interest 18.29 16.02 -12% 47.65
Group Balance Sheet
27
Gross D/E: 2.33
Net Working Capital (excl. Fin. Serv.) : 24% of Sales
` Billion Sep-15 Mar-15Incr /
(Decr)
Net Worth 421.85 409.09 12.76
Minority 60.48 49.99 10.49
Borrowings (Fin. Serv.) 462.06 430.10 31.96
Other Non-Current Liabilities 485.51 406.76 78.75
Other Current Liabilities 713.25 642.07 71.18
Total Sources 2,143.15 1,938.01 205.14
Net Fixed Assets 587.55 475.16 112.39
Goodwill on consolidation 21.85 22.15 (0.30)
Loans & Advances (Fin. Serv.) 490.83 454.26 36.57
Other Non- Current Assets 158.47 156.31 2.16
Cash and Cash Equivalents 150.46 138.21 12.25
Other Current Assets 733.99 691.92 42.07
Total Applications 2,143.15 1,938.01 205.14
Group Cash Flow (Summarised)
28* included under Net Cash from operations under statutory financial statements
` Billion Q1 FY16 Q2 FY16 H1 FY16 Q1 FY15 Q2 FY15 H1 FY15
Operating Profit 23.62 27.68 51.30 23.70 23.89 47.60
Direct Taxes (Paid) / Refund - Net (5.61) (8.33) (13.94) (5.21) (8.54) (13.75)
Changes in Working Capital (6.34) (10.25) (16.59) (6.02) (17.21) (23.23)
Net Cash from Operations (A) 11.68 9.10 20.78 12.48 (1.86) 10.62
Investments in Fixed Assets (Net) (15.90) (8.31) (24.21) (18.29) (15.26) (33.55)
Net Purchase of Long Term & Curr. Inv. (28.00) 6.90 (21.11) (16.13) 10.96 (5.18)
Loans/Deposits made with Associate Cos. (0.01) 0.02 0.01 6.37 0.14 6.51
Interest & Div. Received and Others 3.29 1.30 4.58 1.00 2.21 3.22
Net Cash from/(used in) Invest. Act. (B) (40.63) (0.10) (40.73) (27.05) (1.95) (29.00)
Issue of Share Capital / Minority 6.26 5.72 11.98 5.01 1.89 6.91
Net Borrowings 42.05 28.97 71.02 18.49 44.47 62.96
Disbursements towards financing activities* (19.06) (17.51) (36.57) (6.44) (16.14) (22.58)
Interest & Dividend paid (6.56) (27.14) (33.70) (8.79) (20.64) (29.43)
Net Cash from Financing Activities (C) 22.69 (9.97) 12.72 8.28 9.58 17.86
Net (Dec) / Inc in Cash & Bank (A+B+C) (6.26) (0.96) (7.23) (6.29) 5.77 (0.52)
29
Segment Performance Analysis
30
Segment Composition
Infrastructure PowerMetallurgical &
Material HandlingHeavy Engineering
Electrical &
Automation
Building & Factories EPC – Coal & Gas FerrousProcess Plant
Equipment
Electrical Standard
Products
Transportation Infra Non FerrousNuclear Power Plant
Equipment
Electrical Systems &
Equipment
Heavy Civil Infra Metering & Protection
Water, Smart World &
Communications
Power T&D
HydrocarbonDevelopmental
ProjectsIT & TS Financial Services Others
Upstream Roads Retail & Corporate Shipbuilding
Mid & Downstream Metros Infrastructure Realty
Ports General InsuranceConstruction & Mining
Equipment
Power Mutual Fund Asset
Management
Machinery & Industrial
Products
Construction &
Pipelines
Control & AutomationCritical Piping and ESPDefence & Aerospace
Technology Services
Information
Technology
Bulk Material Handling
Thermal Power Plant
Construction
Infrastructure
72%(68%)
Power9%
(11%)MMH5%(5%)
HE4%(4%)
E&A 1%(2%)
Hydrocarbon6%(7%)
Others3%(3%)
Order Book
Rs 2441 Bn
31
Segmental Breakup of Orders – H1 FY16
Infrastructure
52%(46%)
Power4%
(13%)
MMH4%(4%)
HE3%(4%)
E&A4%(4%)
Hydrocarbon8%
(11%) Services19%(13%)
Others6%(5%)
Figures in brackets indicate corresponding period of the Previous Year
Order Inflow
Rs 550 Bn
68%
32%
Geographical breakup
Domestic International
Infrastructure43%
MMH2%
Power6%
HE3%
Hydrocarbon10%
IT & TS10% Fin. Services
8%
Devl. Proj.6%
Others7%
Segmental Breakup
32
Revenue Breakup – H1 FY16
E&A
5%
Infrastructure Segment
33
Amount in ` Bn
Revenues reflect in-line progress of execution
International business growth contributed by previous years’ order wins
Margin variation primarily due to job mix status
Revenues & Margin
Power Segment
34
Amount in ` Bn
High competitive intensity for fresh orders from State Utilities/PSUs
Revenue growth due to execution progress on opening Order Book
Margin variation due to job mix
Revenues & Margin
Revenue decline due to low sectorial investments and reduced Order Book
Margin drop arising from under utilisations and cost overruns
35
Amount in ` Bn
Metallurgical & Material Handling (MMH) Segment
Revenues & Margin
Oil price drop, muted global growth and excess capacity adversely impacting
business opportunity and profitability
Declining revenues arising out of depleted order book
Margin drop due to volume shrinkage and cost provisions
36
Amount in ` Bn
Heavy Engineering Segment
Revenues & Margin
Flat revenues arising from depressed industrial demand
Stable margins due to operational efficiencies and cost control
37
Amount in ` Bn
Electrical & Automation (E&A) Segment
Revenues & Margin
Challenged legacy Middle East projects nearing execution completion
Middle East Hydrocarbon Capex undergoing curtailment due to oil price decline
Reduced level of international operations giving rise to under-recovery of overheads
Leadership team being strengthened
38
Hydrocarbon SegmentAmount in ` Bn
Revenues & Margin
Growth in end-markets seen across sectors except energy and utilities
Favourable currency movement aiding top line and margins
39
Amount in ` Bn
IT & Technology Services Segment
Revenues & Margin
Revenue growth driven by Realty, Valves and Industrial Machinery businesses
Margins largely arising from Realty business
40
Amount in ` Bn
Others Segment
Revenues & Margin
Increase in revenues and margins (excl. Dhamra) driven by operationalization of Nabha 2nd
Unit and 3 Road SPVs
41
Amount in ` Bn
Developmental Projects Segment
Revenues EBITDA
Balance Equity Commitment (Sep 2015): ` 44 Bn
Total Project Cost (Sep 2015): ` 561 Bn
Equity Invested (Sep 2015): ` 89 Bn
42
Roads and Bridges:
Portfolio: 16 projects (1721 Km); 14 Operational
Project Cost: `178 Bn
Power:
Portfolio: 5 projects (2270 MW); 1 Operational
Project Cost: `178 Bn
Ports:
Portfolio: 2 projects (18 MTPA) - Operational
Project Cost: `21 Bn
Metros:
Portfolio: 1 project (71.16 Km) – Under-implementation
Project Cost: `170 Bn
Transmission Lines:
Portfolio: 1 project (482 Km) – Under-implementation
Project Cost: `14 Bn
Concessions Business Portfolio – 25 SPVs
Steady disbursement growth in key focus areas of B2C products, SME Finance and select
operational Road and Renewable Energy projects
Mutual Fund AAUM at ₹242.80 Bn (17% growth) of which equity assets are 40%
Sequentially stable Gross NPA %; provisioning in excess of RBI norms
43
L&T Finance Holdings
` Billion Q2 FY15 Q2 FY16 % Change FY15
Networth (Incl. Pref. Cap.) 76.50 87.11 14% 77.40
Borrowings 382.73 453.22 18% 420.91
Loans and Advances 427.62 509.86 19% 472.32
Mutual Fund Average AUM 206.73 242.80 17% 224.97
Gross NPA (%) - 150 DPD 4.29% 3.08% -1.2% 3.08%
Net NPA (%) - 150 DPD 3.32% 2.00% -1.3% 2.10%
PAT (before exceptionals) 1.82 2.15 18% 7.36
44
Presentation Outline
L&T Overview
Business Overview
Group Performance
SectoralOpportunities
& Outlook
Infrastructure Segment – Urban Infra
45
Opportunities:
High end residential projects by cash rich developers
Affordable housing projects by Urban Authorities with
focus on Housing For All targets
Office space build-out by IT majors
Healthcare capacity expansion in India & Middle East
Greenfield Airports and Brownfield expansions
Thrust on Education facility expansion by Gov’t
International urban infra prospects in Oman, UAE,
Qatar, KSA
Presence :
Residential & Commercial Buildings, IT & Office Space,
Hospitals, Shopping Malls, Educational Institutions,
Luxury Hotels, Airport Terminals, and Factory
Buildings
Infrastructure Segment – Transportation Infra
46
Opportunities:
Increased road build-out by NHAI with current focus on
EPC projects
Expressway projects by State Governments
Elevated corridors and Ring Roads in major cities
Dedicated Freight Corridor program
Track modernisation and expansion by Indian Railways
Airport runways
International opportunities in Oman, UAE, Qatar and
KSA
Presence :
Roads, Elevated Corridors, Railway Construction &
Airport Runways,
Infrastructure Segment – Heavy Civil Infra
47
Opportunities:
Metro & Mono Rail projects planned in multiple cities
across India (to decongest urban traffic)
Build out of Hydel Plants in Nepal, Bhutan and NE
States
Thrust being given by Govt on increasing nuclear
power installed base
Thrust on connectivity to hilly states (J&K,
Arunachal, Himachal) with Tunnels and Border Roads
Increased spends on infrastructure facilities for
armed forces
Presence :
Metro Railways, Monorails, Hydel Power Plant
construction, Nuclear (civil) plant construction,
Defence Infrastructure, Special Bridges and Tunnels
Infrastructure Segment – Water & Communication
48
Opportunities:
Thrust on water infrastructure due to falling water
tables across the country
Waste water treatment plants from municipalities
Thrust on river water pollution prevention including
Namami Gange program
Defence sector fibre optic connectivity projects
Smart cities: Security solutions and inter-city
telecom connectivity
Effluent treatment plants in Industrial units/clusters
Presence :
Bulk transmission of water, water treatment, waste
water treatment, sewage rehabilitation, effluent
treatment, telecom infrastructure and security
systems
Infrastructure Segment – Power T&D
49
Opportunities:
Thrust on Grid Strengthening programs with
increasing loads
Thrust on Expansion of T&D grids with growing
generation capacities as well as demand
Transmission efficiency enhancement programs
Feeder Separation scheme and other Rural programs
Dedicated Green Energy Transmission Corridors
Thrust on Solar Power capacity addition
T&D expansion in Oman, UAE, Qatar, Kuwait and KSA
Presence :
Sub-stations, Transmission Lines, Solar Power projects
Infrastructure Segment – Challenges
50
Major Challenges in Infrastructure:
Investment constraints
Lending capacity of Banking system
Government Funding
Lack of private sector interest in PPP projects
Land acquisition
Environmental Clearances
Slow evolution of policy frameworks
Pace of awards and execution
Power Segment
51
Presence : EPC Projects in Power Capacity addition (Coal
& Gas), Coal based Power Plant Equipment (Boilers,
Turbines, ESP, Piping and other Power Auxiliaries)
Challenges:
Fuel supply
Land acquisition
Environment and Forest Clearances
Poor financial health of Distribution Cos
Lack of interest from Private sector investors
Aggressive bidding by competing equipment suppliers
Opportunities:
Base level capacity addition in Coal based Power Plants
EPC prospects for gas-fired power plants in Bangladesh
Improving coal availability outlook
Heavy Engineering & Defence
52
Opportunities: Oil & Gas equipment supply opportunities in India, Middle
East, Far East, Russia, Europe and USA
Nuclear Power Plant equipment in India
Indigenisation thrust for Defence equipment
Interceptor Boats, Naval vessels and Submarines for
Indian Navy and Coastguard
Artillery guns and other equipment for Indian Army
Components for Indian Space Program
Presence : Equipment for process plants (mainly for oil
and gas), Nuclear power plant equipment, Defense (mainly
for navy and army) and Aerospace
Challenges:
Shrinking spends on Oil & Gas with low Crude price
Reduced prospect base of nuclear power equipment post-
Fukushima and consequent on civil liability overhang
Very long prospect-to-award timelines and dominance of
Public Sector and foreign OEMs in Defense orders
Hydrocarbon Segment
53
Opportunities: Select International prospects – Upstream / Mid &
Downstream
Opportunities from ONGC Capex – Upstream / Mid &
Downstream
Opportunities for Fertilizer EPC
Regasification terminals and Pipelines
‘Clean fuel’ projects
Presence : Offshore Platforms, Subsea pipelines,
Floating Systems, Subsea installations, Onshore Oil & Gas
installations, Refineries, Petrochemical and Fertiliser
Plants (EPC), Onshore pipelines, Regasification Terminals
Challenges:
Reduced Capex in Middle East in low Crude price
scenario
Long bid-to-award timelines
Aggressive competition in Domestic and GCC markets
Project execution in international markets
Outlook – Wide circles of influence
Thank You
55
Annexure-1: Group Profit & Loss
56* Includes Insurance Business
H1 FY16 H1 FY15 %
Change
Revenue from Operations 43.88 36.46 25.53 330.58 436.45 401.34 9%
EBITDA 9.22 5.47 6.61 27.52 48.82 48.41 1%
Interest Expenses (0.05) (0.17) (6.78) (8.35) (15.35) (14.61) 5%
Depreciation (1.18) (0.61) (2.11) (9.26) (13.16) (13.56) -3%
Other Income 0.09 0.96 0.02 3.69 4.76 4.92 -3%
Exceptional Items - - - 3.10 3.10 2.49
Provision for Taxes (1.55) (1.87) (0.37) (6.61) (10.39) (9.18) 13%
PAT from Ordinary Activites 6.53 3.78 (2.62) 10.08 17.78 18.47 -4%
Share in profit of Associates - 0.01 0.01 (0.01) 0.01 0.02
Adjustments for Minority
Interest(0.00) (1.77) 0.25 (0.25) (1.77) (0.21)
Profit After Tax 6.53 2.03 (2.36) 9.82 16.02 18.29 -12%
` Billion IT & TS Fin.
Services *
Devl.
Projects
L&T &
Others (Incl.
Eliminations)
L&T Group
Annexure 2: Group Balance Sheet
57
* Includes Insurance Business
^ Partly netted off from Capital Employed in Reported Segment
Sep-15 Mar-15Inc /
(Dec)
Net Worth (Excl. Pref. Cap.) 24.3 35.9 61.4 300.2 421.9 409.1 12.8
Minority Interest 0.0 43.2 10.4 7.0 60.5 50.0 10.5
Borrowings 6.9 462.1^ 296.7^ 216.9 982.6 905.7 77.0
Deferred Payment Liabilities - - 111.0 - 111.0 30.3 80.7
Other Current & Non-Current Liab. 17.5 27.1 31.1 491.4 567.1 542.9 24.2
Total Sources 48.8 568.2 510.7 1,015.5 2,143.2 1,938.0 205.1
Net Segment Assets 48.8 568.2 510.7 1,015.5 2,143.2 1,938.0 205.1
Total Applications 48.8 568.2 510.7 1,015.5 2,143.2 1,938.0 205.1
L&T Group
` Billion IT & TS Fin.
Services *
Devl.
Projects
L&T &
Others (Incl.
Eliminations)
