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Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11 17th Jan 2011
Analyst Presentation – Q3/9M FY11
Analyst Presentation – Q3/9M FY11

17th Jan 2011

Disclaimer

This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company.

future or update any forward looking statements made from time to time by or on behalf

Presentation Outline

Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan
Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan

Q3 / 9M FY11 Performance

Segmental Analysis
Segmental
Analysis
Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011

Performance of Key Subsidiaries

Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011
Outlook
Outlook

Presentation Outline

Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan
Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan

Q3 / 9M FY11 Performance

Segmental Analysis
Segmental
Analysis
Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011

Performance of Key Subsidiaries

Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011
Outlook
Outlook

Key Highlights – FY11

Key Highlights – FY11 BTG Factories Commissioned Salalah (Oman) International airport order bagged Largest BOT
BTG Factories Commissioned
BTG Factories Commissioned
Salalah (Oman) International airport order bagged
Salalah (Oman) International airport order bagged
Largest BOT concession won (Hyderabad Metro)
Largest BOT concession won (Hyderabad Metro)
Factories for Power Auxiliaries being set up
Factories for Power Auxiliaries being set up
Shipbuilding (Kattupalli) & forging ventures on course
Shipbuilding (Kattupalli) & forging ventures on course

Performance Highlights

Order Inflow
Order Inflow
Sales
Sales
Order Book
Order Book
EBITDA Margins
EBITDA Margins
Recurring PAT
Recurring PAT

Q3

25%

25% 40% 26% 160 bps 16%

40%

25% 40% 26% 160 bps 16%

26%

25% 40% 26% 160 bps 16%

160

bps

16%

9M 8% 22% 26% 0 bps
9M
8%
22%
26%
0 bps
18%
18%

Order Inflow & Order Book – 9M FY11

Order Inflow & Order Book – 9M FY11 Order Inflow: ` 494. 56 Bn Order Book:

Order Inflow:

` 494.56 Bn

Order Book:

` 1148.82 Bn

Sectoral Break-up

34% 43% 6% 8% 9% 32% 37% 14% 11% 6%
34%
43%
6%
8%
9%
32%
37%
14%
11%
6%
Break-up 34% 43% 6% 8% 9% 32% 37% 14% 11% 6% Infrastructure Power Hydrocarbons Process Others

Infrastructure

34% 43% 6% 8% 9% 32% 37% 14% 11% 6% Infrastructure Power Hydrocarbons Process Others Infrastructure

Power

43% 6% 8% 9% 32% 37% 14% 11% 6% Infrastructure Power Hydrocarbons Process Others Infrastructure Roads

Hydrocarbons

9% 32% 37% 14% 11% 6% Infrastructure Power Hydrocarbons Process Others Infrastructure Roads & Bridges Ports

Process

37% 14% 11% 6% Infrastructure Power Hydrocarbons Process Others Infrastructure Roads & Bridges Ports &

Others

Infrastructure Roads & Bridges Ports & Harbours Airports Railways Buildings & Factories Urban
Infrastructure
Roads & Bridges
Ports & Harbours
Airports
Railways
Buildings &
Factories
Urban Infra
Water
Power Generation Equipment Electrification / Transmission & Distribution
Power
Generation
Equipment
Electrification /
Transmission &
Distribution
Hydrocarbons Upstream Mid & Downstream Pipelines Fertilisers Valves
Hydrocarbons
Upstream
Mid &
Downstream
Pipelines
Fertilisers
Valves

Process Minerals & Metals Bulk Material Handling

Others Shipbuilding Defense & Aerospace Construction & Mining Eqpt. Electrical & Electronic
Others
Shipbuilding
Defense &
Aerospace
Construction &
Mining Eqpt.
Electrical &
Electronic Products
Technology Services

Order Inflow & Order Book – 9M FY11

Order Inflow & Order Book – 9M FY11 Order Inflow Order Book 88% 11% 1% 92%

Order

Inflow

Order

Book

88% 11% 1% 92% 6% 2%
88%
11%
1%
92%
6%
2%
Geographical Break-up
Geographical
Break-up
Customer Profile
Customer
Profile

Domestic

6% 2% Geographical Break-up Customer Profile Domestic Middle East Others 30% 50% 20% 46% 40% 14%

Middle East

Break-up Customer Profile Domestic Middle East Others 30% 50% 20% 46% 40% 14% Private Dev. Projects

Others

30% 50% 20% 46% 40% 14%
30%
50%
20%
46%
40%
14%

Private

Middle East Others 30% 50% 20% 46% 40% 14% Private Dev. Projects - L&T Order Inflow

Dev. Projects - L&T

Order

Inflow

Order

Book

46% 40% 14% Private Dev. Projects - L&T Order Inflow Order Book Public (Incl. PSUs) 17th

Public (Incl. PSUs)

Performance Summary - Topline

Performance Summary - Topline     %       %   Q3 FY11 Q3 FY10
   

%

     

%

 

Q3 FY11

Q3 FY10

Change

` Billion

9M FY11

9M FY10

Change

FY10

133.66

177.93

-25%

Order Inflows

494.56

457.29

8%

695.72

 

Order Book

1,148.82

911.04

26%

1,002.39

113.22

80.71

40%

Net Sales

284.18

233.00

22%

366.75

10.31

16.32

 

--- Exports

30.52

48.97

 

64.46

0.91

0.74

 

Other Operational Income

2.00

1.53

 

3.60

114.13

81.45

40%

Total Net Revenues

286.18

234.53

22%

370.35

Deferment of Award Decisions seen across sectors Execution pickup witnessed in Infrastructure and power sectors
Deferment of Award Decisions seen across sectors
Execution pickup witnessed in Infrastructure and power sectors
BTG orders have started contributing to revenues
Low intake of International Orders in FY10 leading to muted Export
Sales in current year

Performance Summary – Operational Costs

Performance Summary – Operational Costs Q3 FY11   Q3 FY10   9M FY11 9M FY10 `

Q3 FY11

 

Q3 FY10

 

9M FY11

9M FY10

` Bn

%to Total Net Revenues

` Bn

%to Total Net Revenues

Particulars

` Bn

%to Total Net Revenues

` Bn

%to Total Net Revenues

89.61

78.5%

62.56

76.8%

Manf., Cons. & Opex (MCO)

219.08

76.6%

180.68

77.1%

6.77

6.0%

5.46

6.7%

Staff Costs

20.69

7.2%

17.67

7.5%

5.37

4.7%

3.36

4.1%

Sales, adm. & other Exp.

13.75

4.8%

9.34

4.0%

101.75

89.2%

71.38

87.6%

Total Operational Costs

253.52

88.6%

207.69

88.6%

Increased MCO expenses driven by higher commodity prices and job mix change Majority of Power
Increased MCO expenses driven by higher commodity prices and job mix
change
Majority of Power Sector orders in early stage of execution
Staff cost rise led by manpower increase to meet growth
Increase in SGA primarily due to increased activity levels and higher cost
provisions

Performance Summary – Profitability

Performance Summary – Profitability     %       %   Q3 FY11 Q3 FY10
   

%

     

%

 

Q3 FY11

Q3 FY10

Change

` Billion

9M FY11

9M FY10

Change

FY10

12.38

10.07

23%

EBITDA

32.66

26.84

22%

48.16

10.8%

12.4%

-1.6%

EBITDA Margins

11.4%

11.4%

-

13.0%

(1.76)

(1.34)

31%

Interest Expenses

(5.11)

(3.70)

38%

(5.05)

(1.28)

(1.05)

23%

Depreciation

(3.63)

(2.98)

22%

(4.15)

2.47

2.34

 

Other Income

8.41

6.61

 

9.10

(3.70)

(3.06)

 

Provision for Taxes

(10.61)

(8.34)

 

(16.21)

8.11

6.96

16%

Recurring PAT

21.72

18.43

18%

31.85

0.30

0.63

 

Extraordinary & Exceptional Items (Net of tax)

1.01

10.94

 

11.91

8.41

7.59

11%

Profit after Tax

22.72

29.37

-23%

43.76

Quarterly volatility in margins, stable for full period Higher depreciation in line with capex additions
Quarterly volatility in margins, stable for full period
Higher depreciation in line with capex additions
Increased interest cost due to higher borrowing levels and rise in interest rates
Increase in Other Income primarily due to increase in treasury income and S&A
Co. dividend

Performance Summary – Balance Sheet

Performance Summary – Balance Sheet       Increase / ` Billion Dec-10 Mar-10 (Decrease)
     

Increase /

` Billion

Dec-10

Mar-10

(Decrease)

Net Worth

210.06

183.12

26.94

Loan Funds

78.55

68.01

10.54

Deferred Tax Liabilities (Net)

0.99

0.77

0.22

Total Sources

289.60

251.90

37.70

Net Fixed Asset

72.02

63.66

8.36

Current Investments

69.51

79.65

(10.14)

Invt./ICDs/Loans & Advances to S&A Cos

100.88

76.79

24.09

Other Investments

3.04

5.49

(2.45)

Net Current Assets

44.15

26.31

17.84

Total Applications

289.60

251.90

37.70

Gross D/E: 37% Capex Outlay: ` 10.80 Bn Segmental NWC stable at 7.5% (% of
Gross D/E: 37%
Capex Outlay: ` 10.80 Bn
Segmental NWC stable at 7.5%
(% of Sales)
Increase in Corporate Current
assets (` 14.80 Bn) driven by
dividend payout
Support to S&A Cos includes: L&T IDPL - ` 7.09 Bn L&T Fin. & Infra
Support to S&A Cos includes:
L&T IDPL - ` 7.09 Bn
L&T Fin. & Infra Fin - ` 4.72 Bn
L&T Power Development – ` 3.11 Bn
L&T Power (MHI JVs) - ` 1.53 Bn
L&T General Insurance - ` 1.46 Bn
Road SPVs - ` 1.61 Bn
Infotech - ` 1.00 Bn

Presentation Outline

Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan
Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan

Q3 / 9M FY11 Performance

Segmental Analysis
Segmental
Analysis
Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011

Performance of Key Subsidiaries

Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011
Outlook
Outlook

Segmental Break-up – 9M FY11

Segmental Break-up – 9M FY11 Net Revenues Machinery & Industrial Products Others 1.6% (1.1%) Engineering

Net Revenues

Machinery &

Industrial

Products

Others

1.6%

(1.1%)

Engineering

&

6.5%

(6.3%)

Others 1.6% (1.1%) Engineering & 6.5% (6.3%) Electrical & Construction Electronics 7.0% (7.8%) 84.9%

Electrical &

Construction

Electronics

7.0%

(7.8%)

84.9%

(84.8%)

EBITDA

Others

2.1%

(1.6%)

Machinery &

Industrial

Products

10.1%

(10.4%)

Engineering

&

Construction

10.1% (10.4%) Engineering & Construction Electrical & Electronics 7.2% (9.1%) 80.6% (78.9%)

Electrical &

Electronics

7.2%

(9.1%)

80.6%

(78.9%)

Figures in the bracket indicate corresponding period of the Previous Year

‘Engineering & Construction’ Segment

‘Engineering & Construction’ Segment     %       %   Q3 FY11 Q3 FY10
   

%

     

%

 

Q3 FY11

Q3 FY10

Change

` Billion

9M FY11

9M FY10

Change

FY10

117.62

164.65

-29%

Total Order Inflows

444.87

418.42

6%

638.99

34.30

0.29

 

--- Exports

50.82

20.86

 

29.31

 

Total Order Book

1,124.98

893.75

26%

983.86

--- Exports

90.49

83.06

 

71.28

98.69

68.29

45%

Total Net Revenues

243.04

198.76

22%

318.42

8.00

14.40

 

--- Exports

24.23

43.07

 

56.26

11.48

9.14

26%

EBITDA

30.34

24.32

25%

43.39

11.6%

13.4%

-1.8%

EBITDA Margins

12.5%

12.2%

0.3%

13.6%

 

Net Segment Assets

70.29

66.69

5%

62.91

Aggressive pricing witnessed in Hydrocarbon segment Export order growth driven by Infrastructure and T&D Execution
Aggressive pricing witnessed in Hydrocarbon segment
Export order growth driven by Infrastructure and T&D
Execution ramp up started for BTG orders. Pickup seen in Infrastructure
orders under execution
Short term Margin volatility due to increased commodity prices (mainly
steel) and job-mix change

‘Electrical & Electronics’ Segment

‘Electrical & Electronics’ Segment Q3 FY11 Q3 FY10 % ` Billion 9M FY11 9M FY10 %

Q3 FY11

Q3 FY10

%

` Billion

9M FY11

9M FY10

%

FY10

Change

Change

7.21

6.51

11%

Total Net Revenues

20.16

18.30

10%

26.94

0.41

0.66

 

---Exports

1.48

1.95

 

2.74

0.94

0.94

1%

EBITDA

2.69

2.80

-4%

4.23

13.1%

14.4%

-1.3%

EBITDA Margins

13.4%

15.3%

-1.9%

15.7%

 

Net Segment Assets

12.04

11.02

9%

11.32

Gradual pickup in Industrial and agricultural demand driving sales Margins affected by sharp spike in
Gradual pickup in Industrial and agricultural demand driving sales
Margins affected by sharp spike in inputs costs (mainly silver and
copper), drop in exports and competitive price pressures
Efforts on for better cost pass-through

‘Machinery & Industrial Products’ Segment

‘Machinery & Industrial Products’ Segment     %       %   Q3 FY11 Q3
   

%

     

%

 

Q3 FY11

Q3 FY10

Change

` Billion

9M FY11

9M FY10

Change

FY10

6.54

5.71

15%

Total Net Revenues

18.48

14.82

25%

21.35

0.61

0.44

 

---Exports

1.23

1.57

 

2.06

1.37

1.25

10%

EBITDA

3.80

3.21

18%

4.71

20.9%

21.9%

-1.0%

EBITDA Margins

20.6%

21.6%

-1.0%

22.1%

 

Net Segment Assets

3.28

1.76

86%

2.24

Growth in Sales led by increased offtake in Industrial valves and Mining & Construction equipment
Growth in Sales led by increased offtake in Industrial valves and
Mining & Construction equipment business
Increase in Net Segment Assets driven by higher NWC

‘Others’ Segment

‘Others’ Segment     %       %   Q3 FY11 Q3 FY10 Change `
   

%

     

%

 

Q3 FY11

Q3 FY10

Change

` Billion

9M FY11

9M FY10

Change

FY10

1.68

0.95

77%

Total Net Revenues

4.49

2.64

70%

3.65

1.29

0.83

 

---Exports

3.59

2.38

 

3.26

0.24

0.22

6%

EBITDA

0.78

0.48

64%

0.52

14.2%

23.6%

-9.4%

EBITDA Margins

17.5%

18.1%

-0.6%

14.2%

 

Net Segment Assets

2.10

1.83

15%

2.03

Momentum picking up in Integrated Engineering Services, mechanical and embedded – high growth during scale
Momentum picking up in Integrated Engineering
Services, mechanical and embedded – high growth during scale up
Steps being taken to improve margins

Presentation Outline

Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan
Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan

Q3 / 9M FY11 Performance

Segmental Analysis
Segmental
Analysis
Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011

Performance of Key Subsidiaries

Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011
Outlook
Outlook

L&T Infotech

Total Income

21%

17.57

L&T Infotech T o t a l I n c o m e 21% 17.57 14.54

14.54

6.04

5.88

5.65

5.12

4.69

4.73

9M FY10 Q1
9M FY10
Q1
9M FY11 Q3
9M FY11
Q3
Q2

Q2

6.04 5.88 5.65 5.12 4.69 4.73 9M FY10 Q1 9M FY11 Q3 Q2 Amount in `

Amount in ` Bn

Profit after Tax

2.30 20% 1.91 0.73 0.73 0.76 0.57 0.81 0.61 9M FY10 9M FY11 Q1 Q2
2.30
20%
1.91
0.73
0.73
0.76
0.57
0.81
0.61
9M FY10
9M FY11
Q1
Q2
Q3
Business recovery in line with IT industry
Business recovery in line with IT industry

Financial Services – H1 FY11

Financial Services – H1 FY11   Total Income     PAT PATMargins ` Billion    
 

Total Income

   

PAT

PATMargins

` Billion

   

%

   

%

   

H1 FY11

H1 FY10

Change

H1 FY11

H1 FY10

Change

H1 FY11

H1 FY10

L&TFinance

6.39

4.22

51%

1.23

0.57

114%

19.2%

13.6%

L&TInfrastructureFinance

3.09

1.99

55%

0.98

0.50

95%

31.7%

25.3%

Healthy growth in income driven by resilient economy Improvement in PAT driven by healthy NIMs
Healthy growth in income driven by resilient economy
Improvement in PAT driven by healthy NIMs

Developmental Projects

Developmental Projects Roads & Bridges 15 projects 5701 Lane Km Proj. Cost: ` 132 Bn Power
Developmental Projects Roads & Bridges 15 projects 5701 Lane Km Proj. Cost: ` 132 Bn Power
Developmental Projects Roads & Bridges 15 projects 5701 Lane Km Proj. Cost: ` 132 Bn Power
Roads & Bridges 15 projects 5701 Lane Km Proj. Cost: ` 132 Bn
Roads & Bridges
15 projects
5701 Lane Km
Proj. Cost: ` 132 Bn
Power 5 projects 2828 MW Proj. Cost: ` 210 Bn
Power
5 projects
2828 MW
Proj. Cost: ` 210 Bn
` 132 Bn Power 5 projects 2828 MW Proj. Cost: ` 210 Bn Ports 3 projects
` 132 Bn Power 5 projects 2828 MW Proj. Cost: ` 210 Bn Ports 3 projects
` 132 Bn Power 5 projects 2828 MW Proj. Cost: ` 210 Bn Ports 3 projects
Ports 3 projects 45 MTPA Proj. Cost: ` 53 Bn
Ports
3 projects
45 MTPA
Proj. Cost: ` 53 Bn
Metro Rails 1 project 71.16 Km Metro rail Est. Cost: ` 150 Bn
Metro Rails
1 project
71.16 Km Metro rail
Est. Cost: ` 150 Bn

Urban Infra 14 projects 19.9 Million sq.ft Proj. Cost: ` 68 Bn

Total Project Cost (Dec 2010): ` 613 Bn Total Equity Commitment (Dec 2010): ` 125
Total Project Cost (Dec 2010): ` 613 Bn
Total Equity Commitment (Dec 2010): ` 125 Bn
Total Equity Invested (Dec 2010): ` 38 Bn

Presentation Outline

Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan
Presentation Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan

Q3 / 9M FY11 Performance

Segmental Analysis
Segmental
Analysis
Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011

Performance of Key Subsidiaries

Outline Q3 / 9M FY11 Performance Segmental Analysis Performance of Key Subsidiaries Outlook 17th Jan 2011
Outlook
Outlook

Outlook

Outlook Economy Political Situation •High GDP growth continues •Strong Domestic savings •Mature monetary policy
Economy Political Situation •High GDP growth continues •Strong Domestic savings •Mature monetary policy
Economy
Political Situation
•High GDP growth continues
•Strong Domestic savings
•Mature monetary policy
•Worrisome Inflation
•Fears of slowdown
•Troublesome CA Deficit
•Coalition pains
•Scams and corruption probes
•Logjams being witnessed
(environment, Go-No Go
areas, Parliament impasse, etc.)
•Consensus approach being
adopted
Outlook
Capability
Capacity
•Verticalisation on track
•Ongoing Talent management
•Sound Business Strategy
•Well funded Balance sheet
•Healthy Cash flows
•Thrust towards building of large
utility asset portfolios
•Power equipment manufacturing
on stream
•Other ventures (Shipbuilding &
Forging) progressing on schedule
17th Jan 2011 2 5
17th Jan 2011 2 5
17th Jan 2011 2 5
17th Jan 2011 2 5
17th Jan 2011 2 5
17th Jan 2011 2 5

Annexure 1: Details of Other Income

Annexure 1 : Details of Other Income ` Billion 9M FY11 9M FY10 Interest Income 2.48

` Billion

9M FY11

9M FY10

Interest Income

2.48

0.89

Dividend from S&A Companies

1.48

0.19

Income from Other Investments

1.39

1.93

Profit on sale of investments

0.69

1.67

Miscellaneous Income

2.37

1.93

Total - Other Income

8.41

6.61