FINLATICS RESEARCH TASK

Research Insight- 3
L&T TECHNOLOGY SERVICES LIMITED

Submitted By:
Kumardeep Singha
kumardeep.singha1999@gmail.com
Date of Submission – 17th October, 2020

GENERAL OVERVIEW:
L&T Technology Services Limited is an India-based engineering research and development
services company. The Company is engaged in providing a range of engineering services
and related technologies in the areas of embedded systems, mechanical and others. Its
segments include Transportation, Process Engineering, Industrial Products, Medical devices
and Telecom. The Company also acts as a service provider to companies in India and
abroad. It offers services, including embedded system and applications; engineering process
services; mechanical engineering; product lifecycle management (PLM), and consulting
services. It also offers solutions, including engineering analytics; Internet of Things and
machine to machine; power electronics, and semiconductor Internet protocol (IP) solutions.
The Company exports engineering and design services to North America, Europe, the
Middle East, Japan, Korea and other Asia-Pacific (APAC) countries. The Company is a
subsidiary of Larsen & Toubro Limited.
FINANCIAL PERFORMANCE OF L&T –

Financial Performance of L&T

  2020 2019 2018 2017 2016
Revenue 5181.3 4712 3506.6 3112.5 2894.04
Net Profit 790 700.1 489.4 449 434.24
Net Worth 2620 2435.9 1965.3 1531.5 1116.25

Financial performnce of L&T

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2020 2019 2018 2017 2016

Revenue Net Profit Net Worth

SHAREHOLDING PATTERN OF L&T TECHNOLOGY SERVICES LIMITED:

Description Percent of
Share (%) Percent of Share (%)
Promoters Foreign Institutions
Promoters 74.36 Non-Institutions Others
General Public Financial Institutions
Foreign Institutions 7.97 5% 5%
7% 1%

Non-Institutions 5.16 8%

Others 4.89

General Public 6.95

74%
Financial Institutions 0.66

L&T technology services is mainly backed by Promoters holding 74% of the total
share capital followed by Foreign Institutions(7.97%), Non-Banking Institutions (5.16%).

MANAGEMENT OF THE COMPANY-

 Mr. A. M. Naik
Founder Chairman,
L&T Technology Services Limited
Joined L&T in 1965
Appointed as GM of L&T in 1985
Took over as the vice-president of the organization and became member of the director
board in 1989
In 1995, he becomes the President of L&T
Takes over as the Chief Executive Officer and the Managing Director in 1999
Appointed as the Chairman and Managing Director of the organisation in 2003

Mr. S. N. Subrahmanyan
Vice Chairman,
L&T Technology Services Limited
Joined L&T in 1984 as Project Planning Engineer
Civil Engineering Degree and a Post Graduation in Business Management
Appointed as CEO and MD of L&T in July 2017

Dr. Keshab Panda

Chief Executive Officer and Managing Director,
L&T Technology Services Limited
CEO, Director and Managing Director of L&T since 2015
Graduate degree from Indian Institute of Science, a doctorate from Indian Institute of
Technology Bombay
In the past he occupied the position of Research Scientist at Indian Space Research
Organisation, Scientist-Light Combat Aircraft Development at India Defence Research &
Development Organisation
 Mr. Amit Chadha
Deputy CEO & Whole-Time Director,
L&T Technology Services Limited
Joined L&T Technology Services in 2009, as Business Head of America
Certified under the Global Business Leadership Executive Program with Harvard Business
School & an Advanced Management Program in Business Leadership from INSEAD, France.

Mr. Sudip Banerjee

Independent Director,
L&T Technology Services Limited
Joined L&T as Independent Director in 2008
A graduate degree in Arts (honours course) in economics & a diploma in management from
the All India Management Association, New Delhi
Has experience over 32 years in IT Industry

Mr. Abhishek Sinha

 Chief Operating Officer (COO) & Whole Time Director, 
L&T Technology Services
Joined L&T on October 18, 2019
Engineering Graduate from Banaras Hindu University
Worked for Infosys from 1993-2013

Mr. Arjun Gupta

Independent Director,
 L&T Technology Services Limited
Appointed as Independent Director at L&T on October 28, 2015
Economics Graduate and a P.G. Degree in Business Administration from Stanford
University
He has over 27 years of experience working with technology companies in engineering,
consulting and venture capital roles

Mr. Samir Desai

Independent Director,
L&T Technology Services Limited
Joined L&T on April 30, 2014
Post-Graduate degree in electrical engineering and an MBA from Loyola University,
Chicago
He has over 30 years of experience and also as a Chief Information Officer at Motorola

Mr. Narayanan Kumar

Independent Director,
L&T Technology Services Limited
Independent Non-Executive Director at L&T since 2016
Graduate degree in electronics and communications engineering from the University of
Madras
He is on the board of various public companies such as Bharti Infratel Limited, Times
Innovative Media Limited, MRF Limited, and L&T, among others and has experience in
various sectors.

Ms. Apurva Purohit

Independent Director,
L&T Technology Services Limited
Associated with L&T since 2019
She holds a Bachelor’s Degree in Science (Physics) & PGDM from IIM Bangalore.
Over three decades of experience in the media and entertainment industry, she leads digital,
print, radio and outdoor in the group
SWOT Analysis of L&T TECHNOLOGY SERVICES LIMITED-

L&T SWOT analysis

Strengths Weaknesses

 Strong Brand Name in  Largely dependence on Indian

Construction & Manufacturing in Market
India.  Increasing Debt
 Competitive Advantage
 Technical Expertise
 Strong Financial Position

Opportunities Threats

 Growth in Indian Construction &  Extensive environmental regulations

Engineering Industry  Low oil prices affect the Industry
 Strong Order book position  GST impact can be negative

L&T’s Strengths:
1. Strong Brand Name in construction and manufacturing in India: L&T has a
strong brand name in India in the field of construction and manufacturing which
enhances its trust on its clients. L&T has handled various large scale projects in India
and has successfully created a trustworthy brand name which is very important
especially in the construction industry.

2. Competitive advantage: L&T is one of the most respected companies in India for

engineering for its custom made technology-intensive equipment and systems. With
the strong brand name and strong manufacturing facilities, L&T holds a competitive
advantage.

3. Technical expertise: L&T’s technological capabilities support its design and

manufacturing capabilities and provide an expertise in engineering and project
management. L&T’s Technical expertise provides a competitive advantage to the
company.

4. Strong financial position: L&T’s financial position has been improving from the past
few years with company’s total assets growing at a CAGR of 18% and its total capital
grew at a CAGR of 12% from FY2011-15. Improving financial conditions provides a
cushion at the time of adverse market conditions.

L&T’s Weakness:
1. Dependence on Indian market: Indian market contributes over 65% of its total
revenues and thus makes L&T largely dependent on the Indian market.
 Overdependence on a particular market makes the company vulnerable to any
fluctuations in the Indian market.

2. Increasing debt: L&T’s debts have been increasing steadily for the past few years.
L&T’s debt has increased from INR 98960 million in FY2011 to INR 136090 in
FY2016. Increasing debts impact company’s financial flexibility.

L&T’s Opportunities:
1. Growth in Indian construction and engineering industry: The Indian construction
and engineering industry grew by 8% year on year. With expected high government
and private spending on infrastructure in the next 10 years on smart cities, metro
projects etc. L&T is well placed to leverage the opportunity created in the industry.

2. Strong order book position: L&T has won various contracts in the recent past and
secured new orders worth more than $20000 million in the year 2015-16 which
showed a growth of over 7% over the year.

L&T’s Threats:
1. Extensive environmental regulations: L&T is subject to follow extensive
environmental regulations relating to health, pollution, waste disposal etc. These
regulations increase compliance cost for the company.

2. Low Oil prices affect the industry: With oil prices decreasing, various drilling
projects have been stopped and expansion plans have been scaled back. This affects
growth opportunity for the company and the industry.

3. GST impact can be negative: The cost of under construction buildings are expected
to increase with GST and it will have an overall negative impact on the construction
industry.

Competitive Analysis:-
Competitive Analysis of L&T TECHNOLOGY SERVICES LIMITED
Net Total
Last Market Sales Profit Assets
price Capitalization Turnover (Rs. In (Rs. In
Companies (Rs.) (Rs. In crore) (Rs. In crore) crore) crore)
LARSEN & TOUBRO 894.2 125,550.15 82,383.65 6,679.21 78,908.17
SIEMENS 1,265.30 45,057.33 13,683.80 1,086.90 9,354.60
HAVELLS INDIA 697.7 43,676.02 9,429.20 733.03 4,525.65
HONEYWELL AUTO 30,041.85 26,557.00 3,290.01 491.48 2,305.21
HIND AERONAUTICS 744.9 24,908.71 21,438.38 2,832.36 27,995.78
 Competitive Analysis
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Market Capitalization Sales Turnover Net Profit Total Assets

Price Comparison of Last 5 Years

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O A J A F D O A J A F D O A J A F D O A J A F D

L&T SIEMENS Havells India

Recommendations/Conclusion: -
Larsen & Toubro Limited (L&T) is a giant in the field of construction and manufacturing in
India. L&T also has ventured into electronic and electrical equipment, financial services and
information technology. L&T has observed impressive growth in revenue in the past few years
and has many projects in the pipeline currently.

Larsen & Toubro's (L&T) strong business franchise, solid project execution track record, and a
broad exposure to diverse industries have helped the company grow revenue and earnings, both
in domestic and international markets.

However, even though L&T operates in diverse businesses which provide multiple revenue
streams, we believe the company doesn't have an economic moat, since a majority of its revenue
is derived from low-margin engineering and construction (E&C) business. L&T has earned
excess returns (on invested capital) over and above its cost of capital in three of the past five
years, and we expect this trend to continue.

L&T occupies a dominant position in the highly competitive domestic E&C industry, and has
created a strong brand image as a result of nearly seven decades of strong project execution
performance. The company's order book is well-diversified across industries such as
infrastructure (roads, ports, rail and shipbuilding), power (generation and transmission &
distribution), process, hydrocarbons (upstream, mid & downstream and pipelines), and
construction.

Apart from all the favorable points in favour of L&T I would like to suggest that they should
widen their operations worldwide as they are mainly dependent on Indian Market that could be a
threat in near future. Otherwise, they have the great potential to be the market leader in
Technology sector in India.

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