LNT Final Prsntn New
-
Upload
vishal-ahuja -
Category
Documents
-
view
225 -
download
0
Transcript of LNT Final Prsntn New
-
8/3/2019 LNT Final Prsntn New
1/32
February 2, 2012 STRATEGIC ANALYSIS OF L&T 1
PRESENTED BY :
TEAM L&T
-
8/3/2019 LNT Final Prsntn New
2/32
INTRODUCTION
Founded in 1938 by two Danish Engineers
Headquarters at Mumbai
Initial Business - Importofmachineryfrom Europe
Technology-driven Engineering and Construction Company
February 2, 2012 2STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
3/32
February 2, 2012 3STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
4/32
SIGNATURE OF EXCELLENCE
Worlds largest coal-gasifier madeinIndia andexportedto
China
Indiasfirstindigenoushydrocrackerreactor
Worlds largest Continuous Catalyst Regenerationreactor
Worlds longestgaspipeline
Building aninternational classfootball stadiumin 260 days
February 2, 2012 4STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
5/32
February 2, 2012 5STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
6/32
L & T MARKETING
STRATEGIES Goingglobalplan
Developingexportmarket
Strategyformarketpenetration
Forgingstrongpartnershipswith Supplierbase
Innovation & TQM
Issues & hurdlesfaced
o MadeinIndia a mentalblock
o Brand licensing
February 2, 2012 6STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
7/32
Participationininternational exhibitions
Websites & links
Roadshows
Participatinginmajortenders
Directselling
METHODS/ WAYS OF SALES
PROMOTION
February 2, 2012 7STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
8/32
MERGERS, ACQUISITIONS &
DIVES
TITURES
L& T Financeholdings Divestiture
Tamco Shanghaiswitchgearcompany Divestiture
Citigroupfunditbusiness Acquisition
L& T Bombaydevelopers Pvt.Ltd. Divestiture
DBS Cholamandalam assetmanagement - Acquisition
February 2, 2012 8STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
9/32
M & A (Contd...)
Satyam computerservices Increaseinstake
Tamco corporateholdings Berhad Acquisition
Cityunionbank Stake
L&T urbaninfrastructure Divestiture
L&T infrastructuredevelopment - Divestiture
February 2, 2012 9STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
10/32
JOINT VENTURES
L&T JV withMitsubishi
Technological transfer- supercriticalboiler
o Higherefficiency
o Reductioninemission
o Operational efficiency
L&T JV with Cassidian
Design,distributeelectronic warfare,radars, avionics
o Cassidian exeprience with DRDOo Reduceindia`s dependenceonforeign companies
o Markitspresenceinglobal market
February 2, 2012 10STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
11/32
INFORMATION TECHNOLOGY
StrategyinIT governance
RunningIT & LeveragingIT
Strategyin Virtual reality centre
Strategyin E-commerce
February 2, 2012 11STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
12/32
ERP AND UPGRADE POLICIES
Majorbusinessisheavyequipment
o Currentlyrunning16 ERP systems
Biggest challenge : L&Ts ECC division
Somefunctionsin Excel and legacysystems
Not all in ERP different BPR & disruptsusers
February 2, 2012 12STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
13/32
ENTERPRISE INFRASTRUCTURE
MANAGEMENT Importantpartofoptimisation bothprocess & Technology
CA Unicenterhandles complexsystems
IT InfrastructureLibrary
BS7799 Certified
Information Security
o threatmorefrominside
February 2, 2012 13STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
14/32
SUPPLY CHAIN MANAGEMENT
Major objectives ofSCM in L&T are:
Cost Reduction
Transparent practices
Minimum landed cost
Uniform Costs
Placing products at right time and right place
February 2, 2012 14STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
15/32
SUPPLY CHAIN MANAGEMENT
(Contd..)
L&T has divided the entire logistics function into two parts
Freight Management Centre
Day to Day Operations
February 2, 2012 15STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
16/32
GROWTH STRATEGIES OF L & T
Newbusinessstructureroll-out (Lakshya Plan)
Capacity Expansion
o SuperCritical Boiler& TurbineGenerators
o Modularfabricationyard
o Heavy-lift-cum-pipe-layvessel LTS 3000
International Business
February 2, 2012 16STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
17/32
RESEARCH & DEVELOPMENT
Expenditureincurredon R&D 91.54 cr in 2009-10,108.98 cr
in 2010-11
R&D expenditure as a percentageonturnover- 0.25%in
2009-10 & 0.29%in 2010-11
R&D intelecom 4G
L&T constructionresearch & testing center
L&T Infotech tosetup R&D centerat BelfastFebruary 2, 2012 17STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
18/32
FINANCIAL PERFORMANCE
306
420
516
696
798
0
100
200
300
400
500
600
700
800
900
FY 07 FY 08 FY 09 FY 10 FY 11
Order Inflow
BillionRs.
369
527
703
1002
1302
0
200400
600
800
1000
1200
1400
FY 07 FY 08 FY 09 FY 10 FY 11
BillionRs.
Order Book
176
249
336367
435
0
100
200
300
400
500
FY 07 FY 08 FY 09 FY 10 FY 11
Net Sales
BillionRs
.
13.9
21
27.1
31.9
36.8
0
5
10
15
20
25
30
35
40
FY 07 FY 08 FY 09 FY 10 FY 11
BillionRs.
Recurring PAT
February 2, 2012 18STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
19/32
FINANCIAL PERFORMANCE
(Contd..)
Orderflow
Sales
OrderBook
EBITDAMargins(E & C)
RecurringPAT
15%
19%
30%
10
bps
15% Orderflow
Sales
Order
Book
EBITDAMargins(E & C)
RecurringPAT
4%
21%
sdq
06
12%
26%
Performance Highlights FY 11 Performance Highlights Q1 FY 12
February 2, 2012 19STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
20/32
FINANCIAL PERFORMANCE
(Contd..)
91%
4%4% 1%
L & T segment-wise Order Inflow 2010-11
Engineering &
Construction
(73013 crore)
Electrical & Electronics
(3261 crore)
Machinery & Industrial
Products (2869 crore)
Others (626 crore)
Total Order Inflow = Rs. 79769 crores
36%
16%
12%
32%
4%
L & T sector-wise Order Book as at Mar 31,
2011
Infrastructure
(46920 crore)
Process (20337 crore)
Hydrocarbon
(15112 crore)
Power (42315 crore)
Others (5533 crore)
Total Order Book = Rs. 130217 crores
February 2, 2012 20STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
21/32
FINANCIAL PERFORMANCE
(Contd..)
90%
8% 2%Order Inflow
Domestic
Middle East
Others
92%
6% 2%
Order Book
Domestic
Middle East
Others
Geographical Break-up
52%
26%
22%
Order Inflow
Private
Public
(Incl PSUs)
Devl Projects-
L & T
Customer Profile
43%
39%
18%
Order Book
Private
Public
(Incl PSUs)
Devl Projects-
L & T
February 2, 2012 21STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
22/32
FINANCIAL PERFORMANCE
(Contd..)
86%
7%
6%1%
L & T segment-wise Sales 2010-11
Engineering &
Construction
(37550 crore)
Electrical &
Electronics
(2987 crore)
Machinery &
Industrial Products
(2699 crore)
Others
(650 crore)
Total Customer Sales = Rs. 43886 crores
82%
7%
9% 2%
L & T segment-wise result 2010-11
Engineering &
Construction
(4772 crore)
Electrical &
Electronics
(399 crore)
Machinery &
Industrial Products
(531 crore)
Others (118 crore)
Total segment result = Rs. 5820 crores
February 2, 2012 22STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
23/32
RATIO ANALYSIS
February 2, 2012 23STRATEGIC ANALYSIS OF L&T
0.3
0.4
0.5
0.4 0.4
0
0.1
0.2
0.3
0.4
0.5
0.6
2007 2008 2009 2010 2011
Debt-Equity Ratio
1.2
1.1
1.2 1.2 1.2
1
1.1
1.2
1.3
2007 2008 2009 2010 2011
Current Ratio
-
8/3/2019 LNT Final Prsntn New
24/32
15.6
19.2
9 8.2 8.9
0
5
10
15
20
25
2007 2008 2009 2010 2011
Interest Coverage Ratio
30.9 31.8
26.9 23.9 24.6
0
5
10
15
20
2530
35
2007 2008 2009 2010 2011
Return On Capital Employed
RATIO ANALYSIS (Contd)
%
February 2, 2012 24STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
25/32
RATIO ANALYSIS (Contd)
27.128.5
2421.5
19.7
0
5
10
15
20
25
30
2007 2008 2009 2010 2011
Return on Net Worth
3.5
3.9
4
3.5
3.8
3.23.3
3.4
3.5
3.6
3.7
3.8
3.9
4
4.1
2007 2008 2009 2010 2011
Debtors Turnover Ratio
%
February 2, 2012 25STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
26/32
0.00
10000.00
20000.00
30000.00
40000.00
50000.00
60000.00
70000.00
80000.00
90000.00
Mar-09 Mar-10 Mar-11 Mar-12E Mar-13E
Net Sales & EBITDA (Rs Cr)
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
Mar-09 Mar-10 Mar-11 Mar-12E Mar-13E
Consolidated Net Profit (Rs Cr)
Salesprojected at Rs.64,06 9Cr& Rs.80568 CrforFY12E and
FY13E
EBITDA marginsexpectedtoincreasemarginally at16.92%FY12E from16.85%forFY11
Consolidatednetprofittogrow at Rs.5142.48 Cr& Rs.6322.39 Cr
forFY12E & FY13EFebruary 2, 2012 26STRATEGIC ANALYSIS OF L&T
FINANCIAL PROJECTIONS
-
8/3/2019 LNT Final Prsntn New
27/32
64.69
90.50
73.1884.46
103.84
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Mar-09 Mar-10 Mar-11 Mar-12E Mar-13E
EPS Growth
Healthy EPS GrowthofRs84.46 & Rs103.84forFY12E & FY13E
At CMP of1609,L & T trades at19.05xitsFY12 earningsof
Rs.84.46 and15.49xitsFY13earningsofRs.103.84
5yearHistorical P/E tradingrangeofL & T at 25xwhichgives
enoughscopeforstock appreciationfrom CMP
P/BV forFY12E & FY13E at3.71x and3.1xrespectively
February 2, 2012 27STRATEGIC ANALYSIS OF L&T
FINANCIAL PROJECTIONS (Contd..)
-
8/3/2019 LNT Final Prsntn New
28/32
HRSTRATEGIES
Lakshya Perspective Plan
Safety
Recruitment & Selection
TalentManagement
Retention
February 2, 2012 28STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
29/32
CSR ACTIVITIES
Healthcare
Education
Environment
DisasterRelief
February 2, 2012 29STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
30/32
SWOT ANALYSIS
StrengthsDiversified portfolio
One of the leaders in the E&C
industry
Wide distribution and network
Proposed restructuringJoint Ventures and associations
WeaknessesLong gestation period
The order book to sales ratio is
lowest for L&T
OpportunitiesEmphasisontheinfra spending
Takeoutfinancing
ThreatsRising input cost
DelayinrealizationofpaymentsChanginggovernmentregulations
RisingInterest costs
February 2, 2012 30STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
31/32
COMPETITIVE ANALYSISL&T ECC:Indias first indigeneous hydrocracker
reactor, Indias biggest offshore
oilplatform for ONGC, worlds largest
Tubular Reactor for Kuwait
NationalPetroleum Co. and Mumbai
International Airport
HCCThe major engineering landmarks are
the worlds longest barrage at Farakka
in West Bengal, Indias first
underground metro, Indias first six-
lane expressway, the unique double
curvature arch dam at Idukki in Kerala
and one of Asias largest breakwaters atEnnore Port in Tamil Nadu.
L&T PowerMajorordersfromprivateplayers
L&T led consortiumbetterplacedtobid
forGovt. Powerprojects
Joint VenturewithMitsubishiHeavy
IndustriesLtd. (MHI), Japaninorderto
attain competenciesbenefit
BHEL:Majorordersfromgovt.
Technologicallynot as competent.
February 2, 2012 31STRATEGIC ANALYSIS OF L&T
-
8/3/2019 LNT Final Prsntn New
32/32
February 2, 2012 32STRATEGIC ANALYSIS OF L&T
ANY
QUERIES?