L&T loses Rs 12k crore revenue in Coronavirus lockdown

By: |
April 25, 2020 3:18 AM

Urging the top management to rise up to the challenge, Subrahmanyan said that once the lockdown is lifted, everyone’s efforts need to double up to try and bridge the revenue gap.

The company has a monthly billing of around Rs 12,000 crore but because of the lockdown which began on March 25 which led to stoppage of work, the same has taken a hit. The company has a monthly billing of around Rs 12,000 crore but because of the lockdown which began on March 25 which led to stoppage of work, the same has taken a hit.

The country’s largest engineering and construction firm, Larsen and Toubro, has lost revenue worth Rs 12,000 crore during the month-long lockdown till now, its CEO and MD SN Subrahmanyan is understood to have told the top management.

Sources said that the company has been doing a series of webinars across sections of employees and communicating its steps to help the community at large to overcome the crisis and also about the impact the lockdown is having on its operations.

The company has a monthly billing of around Rs 12,000 crore but because of the lockdown which began on March 25 which led to stoppage of work, the same has taken a hit. Additionally, Subrahmanyan is understood to have said to the top management that the company is already spending Rs 500 crore on a monthly basis for the upkeep of 1.5 lakh migrant workers staying at camp sites provided by L&T. These workers work on L&T’s sites and projects and they are being paid in full apart from being provided boarding and food. The company will bear this cost till the lockdown is there and operations do not return to normal.

Urging the top management to rise up to the challenge, Subrahmanyan said that once the lockdown is lifted, everyone’s efforts need to double up to try and bridge the revenue gap.

However, given the strong Rs 3.1 lakh crore of order book, the company has revenue and execution visibility of nearly three years, he is understood to have said.

He further said that since oil situation in Middle East will lead to issues there, the company must look at growing businesses in other geographies, especially Africa.

Also, there is a possibility that some of the company’s clients will face financial issues, while there might be others who would want to accelerate certain critical infrastructure projects, so the management must be ready to identify those opportunities, sources said.

He also told the management that they must look after and be accommodative towards MSME vendors as they are critical partners for L&T.

A mail sent to L&T to seek responses remained unanswered till press time.

Earlier, in a letter written to employees late last month Subrahmanyan said that the company has constituted Covid-19 Response Teams (CRT) for the businesses. “These teams comprise senior management team of the respective businesses. A Decision Response Team (DRT) has been tasked with monitoring all directives issued by the Central or state governments or local bodies so that uniform policy decisions may be communicated to all of you,” he said in the letter.

Assuring employees that the tough times will pass, Subrahmanyan further said, “As they say – tough times don’t last forever, tough people do. I am confident that we will get past this crisis, and re-emerge stronger for having overcome one of the gravest crisis of our lives.”

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