L&T to launch 5-yr plan, likely to focus on services business

The Chairman explained that 70% revenue of the Group comes from the "risky" project side

Bs_logoAnil Manibhai Naik, Group Executive Chairman of Larsen & Toubro Limited speaks during a press conference announcing the IPO plans for L&T Infotech in Mumbai on Monday  Photo: PTI
Anil Manibhai Naik, Group Executive Chairman of Larsen & Toubro Limited speaks during a press conference announcing the IPO plans for L&T Infotech in Mumbai on Monday Photo: PTI
Press Trust of India Mumbai
Last Updated : Jul 04 2016 | 9:03 PM IST
Larsen & Toubro will come out with a five-year strategic plan next week and also give a greater thrust on services businesses in finance, infotech and realty, as part of a de-risking move.

"We are launching our five-year strategic plan for the Group on (July) 12th," Larsen & Toubro Chairman A M Naik said here.

"It (services businesses) is at the centre of L&T core vision going forward. In our next five-year plan, we have very clearly narrated that these four businesses will be very important to L&T Group," he told reporters later.

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Naik, however, did not explicitly mention which are the four businesses he was referring to. The Group has a presence in realty, infotech and financial services space, besides the flagship EPC company.

The Chairman explained that 70% revenue of the Group, which counts on the engineering, procurement and construction business as its flagship business, comes from the "risky" project side and hence, services can be of help in de-risking.

"(If) one project does not do well, you lose a lot of money. While (in) the services business, be it financial services, be it IT or technology services and to an extent, when we have our land bank, the realty. They are steady business with steady income and profits. So, it is a big cushion to the rest of the portfolio which is very risky."

Declining to spell out the exact details of the plan, Naik said these four businesses will be the focus areas.

"We have a great hope that we will innovate, we will recreate and make sure we are up to date in whatever new technology that the business needs," said Naik, who retires in September next year.

Naik cited L&T Smart World and Communication, a division within the L&T Construction, saying it was first off the block to offer solutions for smart cities.

It is clocking a revenue of Rs 1,000 crore at present, Naik said, adding he hopes it to grow to Rs 5,000 crore in the next five years.

Naik said the launch of the strategic plan will be followed up with the top management by investing a day to find out what can digital technologies do to their respective businesses on July 13.
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First Published: Jul 04 2016 | 8:42 PM IST