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Presentation-Larsen & Toubro

Date post: 07-Apr-2015
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Amity Business School PERFORMANCE ANALYSIS OF LARSEN&TOUBRO Presented by: Abhilash Mishra MBA GEN A0101909425


Presented by: Abhilash Mishra MBA GEN A0101909425

ObjectivesAmity Business School

Primary Objective is to do a performance analysis of Larsen & Toubro with the help of primary and secondary data analysis

Secondary ObjectivesTo analyze the investors confidence in the company. To analyze the employee confidence in the performance of the company. Determine the consumer confidence in the companys quality of service as against the competitors.yTo do comparative ratio analysis of top 5 companies in construction sector

including L&T and analyze the results. And to see whether the secondary analysis results strengthen my primary analysis results.

LARSEN & TOUBRO Indias Largest Engineering firm

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Founded in 1938 by Henning Holck-Larsen & Soren Kristian Toubro. Employs over 40,000 people in various states across the country. Has presence in various sectors such as

Headquartered in Mumbai. NSE & BSE listed company Chairman & Managing Director Mr. AM Naik

SWOT AnalysisStrengthsStrong Economic growth of country L&Ts experience in India Order book of over 100,000 crores Brand name of Larsen & Toubro An experienced employee base Diversified business group Strong financial results

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WeaknessSlowdown in middle east Average experience employee age nearing retirement Huge attrition rate Low employee satisfaction Week Global Reach Lack of Innovation

OpportunitiesMajor Infrastructure projects coming up (govt.) Indias growth rate above 10% Opportunities from Other south Asian Countries (less dev) Global economic recovery Investment in Defense sector

ThreatsInflationary and cost pressures Threat of a second Global Financial Turmoil Vendor issues Government policies Competitors Taxation policies

Performance FY10(Crs)

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Net Sales 43513 v/s 40187 / 8% up Net Profit 5450 v/s 3789 / 31% up Order Book Over 100,000 crores / 43% up Dividend 12.50/ share Major growth in E&C segment

Research Methodology Data was calculated through question method. SAMPLE SIZE: 80

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TYPE OF SAMPLING: STRATIFIED RANDOM SAMPLING STRATA DISTRIBUTION: STRATA 1 - Investors STRATA 2 - Management (Larsen& Toubro) STRATA 3 - Employees STRATA 4 - Other Stakeholders

(20 people) (20 people) (20 people) (20 people)

Analysis of performance Managements Feedback Employees Feedback Investors Feedback Clients Feedback

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Management Feedback

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Results are in line with expectations. Results have met shareholders expectations. Somewhat compromised on employee salary to maintain good profitability. Management is Positive & Bullish about the future growth of the company.

Employee Feedback

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Employees have rated the companys results as good and somewhat in line with expectations. They have rated management performance as average. ESOP scheme was praised as it has yielded good returns for employees Employees feel that management is cutting down on salaries to maintain profitability

Investors perspective

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Companys year end results are in line with Investors expectation Investors see a similar growth pattern for L&T in coming years. Investors are impressed by management performance during the year. Investors have rated L&T a better option to invest when compared to competitors.

Clients Feedback

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L&T is running high on customer satisfaction and the clients are happy with the quality of service When compared to competitors, the quality is as per the standard. L&T ranks well in terms of time deadlines. Clients feel that L&T is quite innovative while performing projects.

Profit Last 5 yearsProfit After Tax for last 5 yeats6000 5000 4000 Rs (crores) 3000 2000 1000 0 2006' 2007' 2008' Years 2009'

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Net Sales Last 5 yearsNet Sales for the past 5 years50000 45000 40000 35000 Rs ( Crores) 30000 25000 20000 15000 10000 5000 0 2006' 2007' 2008' Years 2009' 2010'

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Data Collection Methods Financial Websites Bloomberg/Factiva Questionnaires Personal Interaction Annual Financial report 2009 10

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Analysts views on Moneycontrol.com/ rediff.com All five companies website.

Recommendations Needs to work on Employee Satisfaction.

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Attrition rate is huge Some mechanism is required Needs to work further on Client Satisfaction. Try to build an international image. Salary structure needs a revision . Subsidiaries require more attention Infotech & L&T Finance. Plan for future as top management is nearing retiring age.

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