From zero, we became owners, says A M Naik

Interview with outgoing group executive chairman of L&T

A M Naik, the outgoing group executive chairman of L&T, speaks to Amritha Pillay about his new role as the non-executive chairman and his journey so far at the country's biggest engineering conglomerate. Edited excerpts:

How has the long journey with L&T been?

Most eventful and very satisfying and I look forward to L&T becoming even greater.

If you had to pick two hits for L&T, what would they be?

The biggest gain is that from zero, we (employees) became owners of the company. There is no precedence to this and perhaps there would not be any. This would be my biggest legacy. Second, the company has grown 20 times and profit 40 times; taking the company from Rs 5,000 crore to Rs 1.5 lakh crore (in market value) was a major success.

And what would be the two big miss?

We overindulged in development projects like roads and power, which are highly capital intensive and possibly, if I was to rethink, I may not do.

Is there any unfinished agenda or projects you intend to complete before you step down?

We have put seven to eight companies for restructuring. At least some of these have to be finished. I think I better finish these and Subrahmanyan should not be bothered.

In the two and half years spent drafting a succession plan, have you also chalked out a retirement plan for yourself?

I will do that after September. Right now, the focus is on firing all cylinders to ensure tasks that should be completed are completed. I do have a plan, but the plan is practical enough only if circumstances are conducive. But for the next three and a half years, I am going to mentor the next generation of leaders. If Subrahmanyan is going to be there for the next 15 years, I will pick five bright guys and position them such that Subrahmanyan mentors them after that. There is an alumina project in Orissa. I will put that project in shape in these years.

How do you plan to spend your working hours? Will you pursue some hobbies?

I used to earlier spend three-four hours a week on philanthropy. Now I will spend at least one hour a day on it. I will promote one or two charity projects every year.

What would be the toughest decision you would have taken in your L&T journey?

I, along with my employees, eventually found a win-win decision to make sure L&T remains autonomous, and sold the cement division at a reasonable price to Grasim. L&T retained the engineering division and grew it 24 times. That was the toughest decision and the biggest legacy.

What would you miss most about L&T?

L&T is my life. I am devoted to it. I have a great deal of attachment and association with L&T and that is something I would never want to miss.

What are the challenges for the new CEO?

We invested heavily in nuclear. But with the Japan calamity, the industry collapsed and capacity is now idling and causing a loss. This is certainly a setback and a big challenge and I think this will need collective wisdom to overcome this. Unless the nuclear industry revives, it will be difficult.