Larsen & Toubro’s group executive chairman AM Naik has finally named his successor.
Addressing the company’s 71st annual general meeting, Naik for the first time mentioned that L&T’s deputy managing director and president S N Subrahmanyan will be his successor once he retires on September 30, 2017.
Though Naik has on some occasions in the past hinted that Subrahmanyan could be his successor, Friday was the first time that he explicitly said so.
Responding to queries from newspersons on his retirement, Naik said, “I have many unfinished agendas, but I have a very good successor (Subrahmanyan) he will finish them.”
The first move towards putting in place a succession plan by the company was made in September 2015, when its board elevated Subrahmanyan as deputy managing director and president with effect from October 1, 2015.
Before that he held the post of senior executive vice-president and had been on the board since 2011.
The appointment of Subrahmanyan had then come with the then chief executive and managing director KV Venkataramanan retiring.
However, Subrahmanyan was not made the CEO and MD like Venkataramanan as Naik had then said that since he was the group executive chairman, a CEO and MD was not required.
“Normally, when the chairman is a non-executive chairman, the CEO and MD’s position is a must,” Naik had said then.
He had added: “But when there is a group executive chairman, the company may think of a different kind of structure. Whether that means that a CEO and MD is required or not, the board has not yet applied its mind to it. It will in due course.”
L&T had in April 2012 split the post of chairman and managing director with Naik becoming group executive chairman and continuing to hold executive powers. Venkataramanan, the then whole-time director and president of the hydrocarbon business, was elevated as CEO and MD. Naik had been appointed chairman and managing director in 2003 but since 2012, Venkataramanan has been looking after the company’s day-to-day business.
Naik had been appointed chairman and managing director in 2003 but since 2012, Venkataramanan has been looking after the company’s day-to-day business.
Meanwhile, in his speech at the AGM, Naik said that L&T’s goal is to achieve a revenue of Rs 2 lakh crore by 2021 without compromising on margins and achieving an order inflow in excess of R2.5 lakh crore per annum.
“We believe that the economic conditions are now starting to turn in favour of your company. Combined with the right strategy and on-ground execution, our target, though ambitious, is achievable,” he said.
In order to achieve the revenue goal, Naik said the first requirement of the company will be to sharpen its business focus.
“We have identified select growth businesses in your company’s broad portfolio. These include IT, technology services, defence, smart world and water management. Our strategic plan involves reallocation of resources — both talent and capital — to businesses with visible value creation potential,” he said.
He said that though there is a lot to do before he hangs up his boots, making the company asset-light is first on his agenda.
“I want to put restructuring of small business into top gear, these are still hanging around in L&T due to bad markets worldwide, which either have to be sold or something needs to be done with them,” he said.
He also said that he has completed mentoring of 50 leaders who form the board of L&T at present, and now he is training younger people in the group.
“I have taken up 20 young people for the next level and now I am mentoring them. I will call them once in two months, so there will be six meetings, and I hope in one year I do a good job of training them,” he said.