1 Analysts Meet -May 2001. 2 Difficult Business Environment Slowing Economy High fiscal deficits &...
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Transcript of 1 Analysts Meet -May 2001. 2 Difficult Business Environment Slowing Economy High fiscal deficits &...
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Analysts Meet -May 2001
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Difficult Business Environment• Slowing Economy
• High fiscal deficits & limited government spending
• Investment Scenario not encouraging– Fewer opportunities
– Slower pace of investments in Power and infrastructure sectors
– Many core sector industries still afflicted by excess capacity
• Poor growth in capital goods and manufacturing sectors
• Many states affected by drought and sparse rains
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Highlights of FY 2001
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Good performance in a challenging environment
• Order Booking increases by 24%– Order backlog higher by 38%
• Sales increase at 5% subdued due to low opening order backlog
• Exports grow two-fold to Rs. 7.24 billion– Export of critical equipment Rs. 0.92 billion– Project Exports Rs. 3.7 billion– Cement/Clinker exports Rs. 2.09 billion
• Substantial improvement in Q4 performance– Cement division returns good performance on the back of
improved prices and operating efficiencies– E&C jobs cross threshold completion levels
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Engineering &Construction
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Major Orders Booked -Domestic
Various Road Jobs in Orissa, Tamil Nadu & Gujarat 10440
Delhi Metro 4300
445 MW Combined Cycle Power Plant at Konaseema, AP 4070
Modernisation Work at Delhi Vidyut Board from BHEL 2035
2nd Compressor Module, HRC Platform-ONGC 1736
Flyover at Calcutta 1760
Water Supply/Drainage jobs for Delhi Jal Board, Govt. of TN and Karnataka
2560
Rs.Millions
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200 MW Gas based power plant at Salalah, Oman 6000
Hospital for Ministry of Health Services, Saudi Arabia - Thinet International
2410
168.1 MW Combined Cycle Power Project for AES Kelanitissa Pvt. Ltd., Sri Lanka
2400
Stadium Building for Govt. of Qatar 523
Major Orders Booked -OverseasRs.Millions
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FY 2001 FY 2000 % Change
Order Booking 72.01 53.83 34%
Sales 45.92 43.53 5%
Order Backlog 96.82 70.29 38%
PBDIT/Sales 11.7% 13.1%
Rs. Billions
E&C - Financial Performance FY 2001
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Cement
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Industry review
• 2% negative growth in consumption– Low infrastructural / development expenditure
– Severe drought conditions in certain states
– Gujarat earthquake
• Prices remained depressed till Nov’00
• Improvement in prices since Dec’00
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Divisional Performance - FY2001• Volume growth of 8%• Margins improved due to price improvement in the last
4 months and cost reduction measures during the year• Margins could have been better but for increase in
– Power & Fuel cost– Limestone royalty– Freight cost
• Continued efforts on operating efficiencies• Arakkonam Grinding Unit commissioned in Dec’00 • Grinding unit at Durgapur under construction, expected
to be commissioned by Dec’01
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Improving Power consumption
FY 99 FY 00 FY 01
ACW 110 105 105
HCW 103 99 92
GCW 83 81 81
APCW 110 88 85Av. for L&T 99 92 90NCCL 107 103 97
kwh/MT of OPC
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CementFinancial Performance FY 2001
FY2001 FY2000 % Change
Sales - Mio. Tons
Domestic 8.95 9.02 (0.8%)
Exports 2.36 1.49 58.4%
Total 11.31 10.51 7.6%
Sales - Rs. Billions. 21.94 19.35 13.4%
Net Realisation - Rs/Ton 1251 1110 12.7%
PBDIT/Sales 17.1% 12.5%
PBDIT/Sales(incl.Fis.benefits) 19.0% 15.9%
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Other Segments
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EBG Financial Performance FY 2001
FY2001 FY2000 % Change
Sales 7.01 6.29 11%
PBDIT/Sales 17.8% 21.1%
(Rs. Billions)
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Diversified Businesses Financial Performance FY 2001
(Rs. Billions)
FY 2001 FY 2000 % Change
Sales 3.39 5.07 (49.6%)
PBDIT/Sales 5.3% 12.7%
•Drop in Sales due to closure of Glass unit till July 2000, transfer of valves business to E&C and transfer of Pithampur unit to JV with Case
•Drop in margin due to closure of Glass unit - impact Rs. 9 crores
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L&T Infotech
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LTITL back on growth trajectory
• Year of consolidation and growth– Management team strengthened by drawing talents
from L&T• CMM SEI Level 4 obtained• 60 new customers added• Several new alliances established with
technology providers• Focus on domain offering
– Telecom, financial services, power and related utilities, health care, manufacturing
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LTITL
Rs. Billions
FY 2001 FY2000 % Change
Revenue 2.51 1.67 50%
PBT 0.42 0.16 163%
PAT 0.36 0.15 140%
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Summary Results FY 2001
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New Orders Booked
53.05
64.4276.88
81.46
104.27
0
20
40
60
80
100
120
Rs.Billions
1996-97 1997-98 1998-99 1999-00 2000-01
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Gross Revenues
53.8857.68
72.92 74.2478.25
0
10
20
30
40
50
60
70
80
Rs.Billions
1996-97 1997-98 1998-99 1999-00 2000-01
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Order Backlog
43.14
52.52 58.7
68.19
97.6
0
1020
3040
50
6070
8090
100
Rs.Billions
1996-97 1997-98 1998-99 1999-00 2000-01
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Segmentwise RevenueSegmentwise Revenue
Others7%Elect.
8%
Cement26% E&C
59%
FY 2001 FY 2000
Others4%Elect.
9%
Cement28% E&C
59%
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Performance Indicators – FY 2001
FY01 FY00 % ChangeOrder Booking 104.27 81.46 28%Sales 78.25 74.24 5%Other Income 2.09 1.75 19%Total Revenue 80.34 75.99 6%Cost of sales 70.21 66.03 6%Operating Margin 10.13 9.96 2%% to sales 12.9% 13.4%Interest 3.61 3.32 9%Depreciation 3.13 2.93 7%PBT 3.39 3.71Extra ord. 0 0.12Tax 0.24 0.41 (41%)PAT 3.15 3.42 (8%)
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Balance Sheet31-Mar-01 31-Mar-00
SHAREHOLDERS' FUNDSShare Capital 2.48 2.48Reserves 37.52 36.16Net Worth 40.00 38.64LOAN FUNDSSecured Loans 30.02 29.05Unsecured Loans 12.62 10.69TOTAL SOURCES 82.64 78.38Net Block incl. CWIP 46.71 45.89Investments 8.13 7.74Current Assets 53.36 47.26Less: Current Liab. 26.00 22.87NCA 27.36 24.39Misc. Expenditure 0.44 0.36TOTAL APPLICATION 82.64 78.38
Rs. Billion
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Prospects FY 2002
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Vivekananda Bridge, Calcutta 4250Jaipur-Kishangarh Road Project 3000Road packages-NHAI, State highways 4000Stadium Projects - Yemen, AbuDhabi, Kuwait 2700Rupsa Bridge, Bangladesh 1000Race Track at Calcutta 1000Water Supply Project, Oman 700
E&C Order Prospects
Rs.Million
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Indian Oil Corporation, Panipat/Mathura/Baroda 14000Power Plant in Gujarat 2500ONGC Platform Jobs 8000BPCL Hydrocracker unit / SRU 9000
ROSA Power 12260
E&C Order Prospects contd..
Rs.Million
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Outlook for Fiscal 2002 - E&C
• Environment continues to be tough with limited opportunities
• Current Order Backlog in excess of Rs. 95 bn
• Good order booking prospects in power, infrastructure and refinery segments
– Timing uncertain
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Outlook for Fiscal 2002 - Cement
• Volume growth of 8% expected. • Key demand drivers being
– Reconstruction work in Gujarat– Major concretising projects to be undertaken by
NHAI – Further fiscal benefits extended to the housing
sector
• Demand may get a further boost with– Good monsoon – Improved spending on infrastructure
• Price stability to continue in the medium term
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HR Thrust
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HR Challenges
• Challenge of attracting talent
• Attrition among the professionals, specially engineers
• Need to nurture and retain talent/special skills
• Need to identify and develop future Leaders
• Improve productivity
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Compensation Increases for young
talent
Compensation Increases for young
talent
MLPMLP
CompetenceBuilding
CompetenceBuilding
AssessmentCentres
AssessmentCentres
ExceptionalProfessionals
Very Good Performers &
Hot Skilled Employees
Very Good Performers &
Hot Skilled Employees
Career AvenuesMovement to
LTITL
Career AvenuesMovement to
LTITL
Multi-pronged strategy to Attract & Retain Talent
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40 MTs250 MLs
MANAGEMENT LEADERSHIP MANAGEMENT LEADERSHIP PROGRAMME (MLP)PROGRAMME (MLP)
Management Leaders
(Nurturing talent from within L&T)
Management Trainees
(Taking talent from outside & nurturing within L&T)
MTS & MLP
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Efforts Towards Globalisation
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Globalisation Strategy
• Pre–Qualification
• Quality Accreditation
• Country / Region Focus
• Exploit JV relationships
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Prequalification
• HED prequalified with– Refineries and oil & gas companies in Middle
East, Far East, South Africa, Venezuala, Brazil and USA
– International EPC contractors – Bechtel, Fluor Daniel, Chiyoda
• E&C prequalified with Petronas, Mobil, Amoco
• Construction group is well recognised in Middle East
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Quality Accreditation
• Quality certification obtained for export to China, UK and Europe
• Cement is manufactured to satisfy British and European standards
• ECC’s international operations are ISO 9001 certified
• Trained manpower conversant with quality standards of Australia, UK, Denmark, Germany and Canada
• LTITL operations are SEI CMM Level 4 certified
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Regional Focus
• Middle East• South East Asia covering ASEAN and SAARC
countries
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Cement Restructuring Update
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Cement Restructuring -Current Status
• Due diligence by potential candidates completed
• JV Agreements and other documents are under discussion with potential candidates
• Binding bids to be received after finalising the documents
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Thank You