To begin with, the new entity will take over the engineering services from L&T Infotech, the companys technology arm, and later all other engineering services within the group will also be transferred to it.
We already have an engineering services business, now we are looking to put all that under L&T Technology Services. It will buyover the engineering piece from Infotech and then the engineering services within L&T will also be transferred to it. The restructuring will be done by April 2014 to bring more focus to the large engineering business that L&T has, AM Naik, group executive chairman said on the sidelines of companys 68th annual general meeting.
He said it was too early to comment on whether it will be listed on the stock exchanges.
In January 2012, L&T reorganised its business into nine independent companies with internal boards. According to the plan, power, hydrocarbon, machinery & product, switchgear, heavy engineering, infrastructure, building & factories, metals & minerals and electrical businesses will be the nine independent companies.
In last years AGM, Naik had said that the company had all its 64 businesses under one company, however, it is undertaking the restructuring plan, to be executed over five years to simplify the companys structure.
As per the plan, earlier this month, L&T sought its shareholders nod for converting its hydrocarbon division into a subsidiary from an independent company, which it said was to achieve its potential and tap global opportunities.
Addressing the shareholders queries Naik said that the companys order backlog stands at R1.75 lakh crore from R1.53 lakh crore that it reported at the end of March.
Naik said, to beat the adverse economic conditions in the domestic market, L&T is continuously growing its international business. This year our order intake from West Asia will cross Rs 30,000 crore, he said responding to a shareholder query. Two years ago, order intake number stood at Rs 6,000 crore and grew to Rs 12,000 crore last year, he added.
At present, L&T has 20% of its revenues coming from international business, which makes it a foreign exchange earner, R Shankar Raman, chief financial officer, L&T, told newspersons. On the rupee movement and its impact on L&T, Raman said, Rupee movement is very skiddish as it is reacting to many things making it difficult to plan long term. We have $1.5 billion of foreign currency debt, of which 10% is unhedged, he said.