PERFORMANCE ANALYSIS OF School

Amity Business

LARSEN&TOUBRO

Presented by: Abhilash Mishra

MBA GEN
A0101909425
Objectives
Amity Business School

• Primary Objective is to do a performance analysis of Larsen &

Toubro with the help of primary and secondary data analysis
• Secondary Objectives

•To analyze the investor’s confidence in the company.

•To analyze the employee confidence in the performance of the company.
•Determine the consumer confidence in the company’s quality of service
as against the competitors.
To do comparative ratio analysis of top 5 companies in construction sector
including L&T and analyze the results. And to see whether the secondary analysis
results strengthen my primary analysis results.
LARSEN & TOUBRO Amity Business School

 India’s Largest Engineering firm

 Founded in 1938 by Henning Holck-Larsen & Soren Kristian

Toubro.
 Employs over 40,000 people in various states across the
country.
 Has presence in various sectors such as

 Headquartered in Mumbai.

 NSE & BSE listed company

 Chairman & Managing Director – Mr. AM Naik

SWOT Analysis
Strengths
Strong Economic growth of country
L&T’s experience in India
Order book of over 100,000 crores
Brand name of Larsen & Toubro
An experienced employee base
Diversified business group
Strong financial results
Opportunities
Major Infrastructure projects
coming up (govt.)
India’s growth rate above 10%
Opportunities from Other
south Asian Countries (less dev)
Global economic recovery
Investment in Defense sector
Amity Business School
Weakness
Slowdown in middle east
Average experience
employee age nearing retirement
Huge attrition rate
Low employee satisfaction
Week Global Reach
Lack of Innovation
Threats
Inflationary and cost pressures
Threat of a second
Global Financial Turmoil
Vendor issues
Government policies
Competitors
Taxation policies
Performance – FY’10(Crs) Amity Business School

• Net Sales – 43513 v/s 40187 / 8% up

• Net Profit – 5450 v/s 3789 / 31% up

• Order Book – Over 100,000 crores / 43%

up
• Dividend – 12.50/ share

• Major growth in E&C segment

 Research Methodology Amity Business School

• Data was calculated through question method.

• SAMPLE SIZE: 80

• TYPE OF SAMPLING:
• STRATIFIED RANDOM SAMPLING

• STRATA DISTRIBUTION:
• STRATA 1 - Investors (20 people)
• STRATA 2 - Management (Larsen& Toubro) (20 people)
• STRATA 3 - Employees (20 people)
• STRATA 4 - Other Stakeholders’ (20 people)
Analysis of performance Amity Business School

• Management’s Feedback

• Employee’s Feedback

• Investor’s Feedback

• Client’s Feedback
Management Feedback Amity Business School

• Results are in line with expectations.

• Results have met shareholder’s expectations.

• Somewhat compromised on employee salary to

maintain good profitability.
• Management is Positive & Bullish about the
future growth of the company.
Employee Feedback Amity Business School

• Employee’s have rated the company’s results as good and

somewhat in line with expectations.
• They have rated management performance as average.

• ESOP scheme was praised as it has yielded good returns

for employees
• Employee’s feel that management is cutting down on
salaries to maintain profitability
Investor’s perspective Amity Business School

• Company’s year end results are in line with Investor’s

expectation
• Investor’s see a similar growth pattern for L&T in coming
years.
• Investor’s are impressed by management performance
during the year.
• Investor’s have rated L&T a better option to invest when
compared to competitors.
Client’s Feedback Amity Business School

• L&T is running high on customer satisfaction and the

client’s are happy with the quality of service
• When compared to competitors, the quality is as per the
standard.
• L&T ranks well in terms of time deadlines.

• Client’s feel that L&T is quite innovative while performing

projects.
Profit – Last 5 years Amity Business School

Profit After Tax for last 5 yeats

6000

5000

4000
Rs (crores)

3000 Series1

2000

1000

0
2006' 2007' 2008' 2009' 2010'
Years
Net Sales – Last 5 years Amity Business School

Net Sales for the past 5 years

50000
45000
40000
35000
30000
Rs ( Crores)

25000 Series1
20000
15000
10000
5000
0
2006' 2007' 2008' 2009' 2010'
Years
Data Collection Methods Amity Business School

• Financial Websites – Bloomberg/Factiva

• Questionnaires

• Personal Interaction

• Annual Financial report – 2009 – 10

• Analyst’s views on – Moneycontrol.com/ rediff.com

• All five companies website.

Recommendations Amity Business School

• Needs to work on Employee Satisfaction.

• Attrition rate is huge – Some mechanism is required

• Needs to work further on Client Satisfaction.

• Try to build an international image.

• Salary structure needs a revision .

• Subsidiaries require more attention – Infotech & L&T Finance.

• Plan for future as top management is nearing retiring age.

Amity Business School