Analyst Presentation Q3 / 9 M FY1 1 17th Jan 2011 Disclaimer This - - PDF document

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Analyst Presentation Q3 / 9 M FY1 1 17th Jan 2011 Disclaimer This - - PDF document

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Analyst Presentation Q3 / 9 M FY1 1 17th Jan 2011 Disclaimer This presentation contains certain forward looking statements concerning L&Ts future business prospects and business profitability, which are subject to a number of risks

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Analyst Presentation – Q3 / 9 M FY1 1

17th Jan 2011

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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,

  • ur

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

  • perations,

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.

17th Jan 2011

Disclaimer

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Presentation Outline

Q3 / 9M FY11 Performance

Segmental Analysis Performance

  • f Key

Subsidiaries Outlook

17th Jan 2011

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Presentation Outline

Q3 / 9M FY11 Performance

Segmental Analysis Performance

  • f Key

Subsidiaries Outlook

17th Jan 2011

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Key Highlights – FY11

5 17th Jan 2011

BTG Factories Com m issioned Shipbuilding ( Kattupalli) & forging ventures on course Factories for Pow er Auxiliaries being set up Salalah ( Om an) I nternational airport order bagged Largest BOT concession w on ( Hyderabad Metro)

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Performance Highlights

6 17th Jan 2011

Order I nflow Sales Order Book EBI TDA Margins Recurring PAT

Q3 9 M

8 % 2 5 % 2 2 % 4 0 % 2 6 % 1 6 0 bps 1 8 % 1 6 % 2 6 % 0 bps

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SLIDE 7

3 2 % 3 4 % 3 7 % 4 3 % 1 4 % 6 % 1 1 % 8 % 6 % 9 %

I nfrastructure Pow er Hydrocarbons Process Others

Order Book: ` 1 1 4 8 .8 2 Bn Order I nflow : ` 494. 494.5 6 Bn

17th Jan 2011 I nfrastructure

Roads & Bridges Ports & Harbours Airports Railways Buildings &

Factories

Urban Infra Water

Pow er

Generation Equipment Electrification /

Transmission & Distribution Hydrocarbons

Upstream Mid &

Downstream

Pipelines Fertilisers Valves

Process

Minerals &

Metals

Bulk Material

Handling Others

Shipbuilding Defense &

Aerospace

Construction &

Mining Eqpt.

Electrical &

Electronic Products

Technology Services

Sectoral Break-up

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Order Inflow & Order Book – 9M FY11

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Order Inflow & Order Book – 9M FY11

17th Jan 2011 9 2 % 8 8 % 6 % 1 1 %

2 % 1 %

Dom estic Middle East Others Order Book Order I nflow 4 6 % 3 0 % 4 0 % 5 0 % 1 4 % 2 0 % Public ( I ncl. PSUs) Private

  • Dev. Projects - L&T

Order Book Order I nflow Geographical Break-up Custom er Profile

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Performance Summary - Topline

17th Jan 2011 9

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

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

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Performance Summary – Operational Costs

17th Jan 2011

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

` Bn % to Total Net Revenues ` Bn % to Total Net Revenues ` 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% Q3 FY11 Q3 FY10 Particulars 9M FY11 9M FY10

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Performance Summary – Profitability

17th Jan 2011

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

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% EBI TDA 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

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Performance Summary – Balance Sheet

17th Jan 2011 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

` Billion Dec-10 Mar- 10 I ncrease / ( 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 2 89 .6 0 2 5 1 .9 0 3 7 .7 0 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 2 8 9 .6 0 2 5 1 .9 0 3 7 .7 0

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

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Presentation Outline

Q3 / 9M FY11 Performance

Segmental Analysis Performance

  • f Key

Subsidiaries Outlook

17th Jan 2011

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Engineering & Construction 8 4 .9 % (84.8% ) Electrical & Electronics 7 .0 % (7.8% ) Machinery & Industrial Products 6 .5 % (6.3% ) Others 1 .6 % (1.1% )

Net Revenues

Engineering & Construction 8 0 .6 % (78.9% ) Electrical & Electronics 7 .2 % (9.1% ) Machinery & Industrial Products 1 0 .1 % (10.4% ) Others 2 .1 % (1.6% )

EBI TDA

Figures in the bracket indicate corresponding period of the Previous Year

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Segmental Break-up – 9M FY11

17th Jan 2011

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‘Engineering & Construction’ Segment

17th Jan 2011

Q3 FY1 1 Q3 FY1 0 % 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 ramp up started for BTG orders. Pickup seen in Infrastructure

  • rders under execution

Short term Margin volatility due to increased commodity prices (mainly steel) and job-mix change

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‘Electrical & Electronics’ Segment

17th Jan 2011

Q3 FY11 Q3 FY10 % Change ` Billion 9M FY11 9M FY10 % Change FY10 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 inputs costs (mainly silver and copper), drop in exports and competitive price pressures Efforts on for better cost pass-through

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‘Machinery & Industrial Products’ Segment

17th Jan 2011

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 business Increase in Net Segment Assets driven by higher NWC

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‘Others’ Segment

17th Jan 2011

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

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

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Presentation Outline

Q3 / 9M FY11 Performance

Segmental Analysis Performance

  • f Key

Subsidiaries Outlook

17th Jan 2011

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L&T Infotech

4 .7 3 5 .6 5 4 .6 9 5 .8 8 5 .1 2 6 .0 4 9 M FY1 0 9 M FY1 1 Q1 Q2 Q3 1 7 .5 7

2 1 %

1 4 .5 4 0 .6 1 0 .8 1 0 .5 7 0 .7 6 0 .7 3 0 .7 3 9 M FY1 0 9 M FY1 1 Q1 Q2 Q3 1 .9 1 2 .3 0

2 0 %

Amount in ` Bn 17th Jan 2011

Business recovery in line with IT industry Total I ncom e Profit after Tax

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Financial Services – H1 FY11

17th Jan 2011

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

H1 FY11 H1 FY10 % Change H1 FY11 H1 FY10 % Change H1 FY11 H1 FY10 L&T Finance 6.39 4.22 51% 1.23 0.57 114% 19.2% 13.6% L&T Infrastructure Finance 3.09 1.99 55% 0.98 0.50 95% 31.7% 25.3% PAT Margins Total I ncome PAT ` Billion

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Developmental Projects

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

Roads & Bridges 15 projects 5701 Lane Km

  • Proj. Cost: ` 132 Bn

Pow er 5 projects 2828 MW

  • Proj. Cost: ` 210 Bn

Ports 3 projects 45 MTPA

  • Proj. Cost: ` 53 Bn

Metro Rails 1 project 71.16 Km Metro rail

  • Est. Cost: ` 150 Bn

Urban I nfra 14 projects 19.9 Million sq.ft

  • Proj. Cost: ` 68 Bn
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Presentation Outline

Q3 / 9M FY11 Performance

Segmental Analysis Performance

  • f Key

Subsidiaries Outlook

17th Jan 2011

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Outlook

24 17th Jan 2011

Econom y

  • High GDP growth continues
  • Strong Domestic savings
  • Mature monetary policy
  • Worrisome Inflation
  • Fears of slowdown
  • Troublesome CA Deficit

Political Situation

  • Coalition pains
  • Scams and corruption probes
  • Logjams being witnessed

(environment, Go-No Go areas, Parliament impasse, etc.)

  • Consensus approach being

adopted

Capability

  • Verticalisation on track
  • Ongoing Talent management
  • Sound Business Strategy
  • Well funded Balance sheet
  • Healthy Cash flows

Capacity

  • Thrust towards building of large

utility asset portfolios

  • Power equipment manufacturing
  • n stream
  • Other ventures (Shipbuilding &

Forging) progressing on schedule

Outlook

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25 17th Jan 2011

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Annexure 1 : Details of Other Income

17th Jan 2011

` Billion 9 M FY1 1 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 I ncom e 8 .4 1 6.61