Larsen & Toubro (L&T) hopes to monetise at least two to three non-core businesses as the engineering major hopes to bag at least one large order in the defence division. “We are redefining our core businesses. There are some businesses which are simple, small, some very competitive, and some where we lose money. So we’ve identified those and we hope at least two-three such businesses may find their rightful place elsewhere as part of much bigger companies,” chairman A M Naik told reporters on the sidelines of the 72nd annual meet. This was Naik’s last AGM as chairman of the group, as he will step down from his executive roles on October 1 but will continue as the non-executive chairman. Bidding an emotional farewell, Naik, who has been with the company from 1965, handed over a bouquet to new chief executive and managing director S N Subrahmanyan, he told the shareholders “your company is in very good hands,” having mentored him all these years.
“Every year new opportunities and new technologies and new markets emerge. A lot of opportunities are available in smart cities, infotech space, and technological applications in engineering and defence, among others. We want to focus on these areas,” he said, adding that the company will also continue to look at acquisitions in the technology space.
Addressing the shareholders, Naik said the company has placed special emphasis on expanding its capabilities in design and manufacturing of defence equipments. “We are one of the largest private sector partners to the nation’s defence forces. We contributed to the first nuclear submarine, built a range of missiles and weapon systems and recently won an order for 100 artillery guns of 155mm/52 calibre.”
Replying to a query of a shareholder on whether L&T would consider listing its defence business, Naik said, “we want to first grow the defence business and take it to a Rs 10,000-15,000 crore size which we hope to achieve in the next five years.” New chief executive and managing director SN Subrahmanyan, who took over the reigns from Naik from July 1, during his maiden address to the shareholders said there are some short-term things to be done towards restructuring.
“Many things need to be done towards restructuring and tending to get more focuses towards the long-term outlook of growing the business and thereby looking towards the futuristic way forward in digital, smart world, defence, among others,” he said.
Later talking to reporters, Subrahmanyan said the company has participated in four programmes, including landing platform docks, anti-submarine ships, survey vessels and deep sea diving vessels–of the government and hopes at least two would be bid out in this financial year. “We hope that we would be L1 in it and we are confident that by the fourth quarter, we would have bagged at least one,” he added.
Naik noted that the focus of the company would be in the Naval side and to some extent in the Army spaces and has no plans to enter the Airforce segment.