Engineering major Larsen & Toubro (L&T) is eyeing revenues of Rs 3,700 crore this fiscal from its electrical systems business, a top company official today said.
"If we add (turnover of) all our foreign subsidiaries, then by this fiscal-end, we will touch consolidated revenues of Rs 3,700 crore, which would mean a growth of about 12-13 per cent over the previous year," L&T President (Operations) R N Mukhija said.
The Electrical & Electronics Division (EBG) manufactures switchgears, metering systems, petrol dispensing pumps and medical equipment, among other things, whose core markets include India, Dubai, Malaysia, Indonesia, China and Australia.
Larsen & Toubro's EBG division comprises the Electrical & Automation Operating Company (EAOC) as a standalone business unit.
Mukhija said this unit alone will constitute Rs 2,900 crore of revenue from the targeted Rs 3,700 crore by March.
EAOC has planned capital expenditure of Rs 500 crore over the next five years to meet an average growth rate of around 22 per cent.
"The average investment of EAOC every year for the next five years is Rs 100 crore. Assuming we don't see the kind of economic problem we had in the past 18 months, EAOC's growth will not be less than 22-23 per cent over the next five years," Mukhija said.
"The fourth quarter promises growth of around 12 per cent as there is improvement in the power and infrastructure sectors, which were affected by the slowdown," Mukhija said.
L&T has 30-35 per cent share in the domestic electrical systems solutions and equipment market. It has manufacturing units in Navi Mumbai, Ahmednagar, Mysore and Coimbatore.
Its overseas business comprises manufacturing units in China and Dubai as well as a joint venture in Saudi Arabia for making and marketing switchboards and motor control centers. Besides, L&T owns Tamco's switchgear-making units in Malaysia, Indonesia, China and Australia, which it acquired in April 2008.
"The real estate sector is improving, which brings demand for switchgear for homes, circuit-breakers and wiring accessories," Mukhija said.
L&T plans to set up more manufacturing facilities in the country as well as take up expansion of existing units at Coimbatore and Ahmednagar to cater to growing demand.
"We want to deepen our reach and sales in Indonesia, Australia and Malaysia over the next few years," he added.
"As of today, none of our capacities are under-utilised and if you look at future demand, naturally we need to plan for more capacities. We are trying to identify the locations. In the next few months, we should be able to firm up the details," Mukhija said.
