L&T to emerge an agile company with Rs2 lakh crore revenue by 2021

Larsen & Toubro is building on its inherent strengths of engineering excellence, professionalism and financial prudence, to emerge as a new L&T that is innovation driven, agile, asset-light and delivers superior value to all stakeholders, chairman A M Naik told shareholders at the company's annual general meeting.

''Our goal is to achieve a revenue of Rs2 lakh crore ($30 billion at current exchange rates) by 2021 – without compromising on our margins and achieving an order inflow in excess of Rs2.5 lakh crore per annum,'' Naik said.

He said a favourable turn in economic conditions combined with the right strategy and on-ground execution, the company will achieve its target, which though ambitious, is achievable.

''India is at the cusp of a turnaround. All indicators are positive. With a projected GDP growth rate of 7.4 per cent in 2016 -17, India is the fastest-growing large economy in the world. The government's thrust on infrastructure and its 'Make in India' initiatives provide a range of opportunities for your company.''

He said the opening up of the defence sector will lead to business opportunities worth Rs13 lakh crore over the next 10 years. With the resolution of issues relating to fuel supply and a clearer understanding on nuclear liability issues, the nuclear power sector is expected to grow significantly in the years ahead. The estimated opportunity from this sector over the next 10 years is up to Rs50,000 crore.

L&T, he said, is well-equipped to seize the opportunity offered by the Prime Minister's ambitious plan to turn 100 cities in India into Smart Cities. Each of these cities will be endowed with a combination of smart infrastructure and IT-led operations.

The outlay for a proposal of this nature is expected to be very large. It is estimated that by 2022, over 110 million homes will be required to be built in urban as well as rural areas to house India's rapidly growing population. The government is bullish on real estate, and has passed numerous policy reforms in the sector.

And finally, in infrastructure – roads, ports, airports, railway corridors – there are over a thousand projects in the pipeline with an estimated total value of over Rs14 lakh crore.

''Your company has both the expertise and the track record to make the most of each of these opportunities. Over the years, we have set benchmarks, only to surpass them ourselves.''

Going ahead, he said, the company has identified select growth businesses as focus areas in a broad portfolio. These include IT, technology services, defence, smart world and water management. ''Our strategic plan involves re-allocation of resources – both talent and capital – to businesses with visible value creation potential. As most of these are also asset-light businesses, the initiative will be in line with our larger objective of building an asset- light organisation.''

In order to improve operational excellence across the company, a separate

`Digital Group' has been set up which will ideate and implement solutions across functions.

Group companies, L&T Infotech and L&T Technology Services will play a key role in this process. These enterprise-wide initiatives will act as a ready-to-market showcase, enhancing client confidence in their capabilities.

L&T, he said, ''has a unique 7-step leadership programme designed to build a robust pipeline of future leaders. The stages include training by some of the world's leading business schools like IIM-A, Ross, INSEAD and Harvard and at the final stage, mentoring by me.''

''I have personally mentored over 50 future leaders and equipped them with the competencies and strength of character to steer your company through the challenges of the future,'' he added.

As an Indian multinational, L&T, Naik said, is strengthening its operations in the Gulf, Africa and South East Asia. ''We are competing with the world's best in those markets and ensuring that our projects and services are truly globally benchmarked. Our manufactured products are exported globally and meet the highest international quality standards,'' he added.

''Over the last few years, we have sharpened our focus on conserving natural resources and enhancing social equity – including making over 50,000 youth employable every year through skill training. Our investment on social initiatives across healthcare, education, water and sanitation and skill building, will deliver rich social dividends in the years ahead,'' Naik said.

(Also see: S N Subrahmanyan to succeed AM Naik as L&T chairman next year)