ammay2001

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1

Analysts Meet -May 2001

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Difficult Business Environment

• Slowing Economy

• High fiscal deficits & limited government spending

• Investment Scenario not encouraging

– Fewer opportunities

– Slower pace of investments in Power and infrastructure sectors

– Many core sector industries still afflicted by excess capacity

• Poor growth in capital goods and manufacturing sectors

• Many states affected by drought and sparse rains

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Highlights of FY 2001

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Good performance in a challenging

environment

• Order Booking increases by 24% – Order backlog higher by 38%

• Sales increase at 5% subdued due to low opening

order backlog

• Exports grow two-fold to Rs. 7.24 billion – Export of critical equipment Rs. 0.92 billion

– Project Exports Rs. 3.7 billion

– Cement/Clinker exports Rs. 2.09 billion

• Substantial improvement in Q4 performance – Cement division returns good performance on the back of

improved prices and operating efficiencies

– E&C jobs cross threshold completion levels

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Engineering &Construction

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Major Orders Booked -Domestic

Various Road Jobs in Orissa, Tamil Nadu & Gujarat 10440

Delhi Metro 4300

445 MW Combined Cycle Power Plant at Konaseema, AP 4070

Modernisation Work at Delhi Vidyut Board from BHEL 2035

2nd Compressor Module, HRC Platform-ONGC 1736

Flyover at Calcutta 1760

Water Supply/Drainage jobs for Delhi Jal Board, Govt. of TN

and Karnataka

2560

Rs.Millions

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200 MW Gas based power plant at Salalah, Oman 6000

Hospital for Ministry of Health Services, Saudi

Arabia - Thinet International

2410

168.1 MW Combined Cycle Power Project for AES

Kelanitissa Pvt. Ltd., Sri Lanka

2400

Stadium Building for Govt. of Qatar 523

Major Orders Booked -Overseas

Rs.Millions

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FY 2001 FY 2000 % Change

Order Booking 72.01 53.83 34%

Sales 45.92 43.53 5%

Order Backlog 96.82 70.29 38%

PBDIT/Sales 11.7% 13.1%

Rs. Billions

E&C - Financial Performance FY 2001

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Cement

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Industry review

• 2% negative growth in consumption

– Low infrastructural / development expenditure

– Severe drought conditions in certain states

– Gujarat earthquake

• Prices remained depressed till Nov’00

• Improvement in prices since Dec’00

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Divisional Performance - FY2001

• Volume growth of 8%• Margins improved due to price improvement in the last

4 months and cost reduction measures during the year

• Margins could have been better but for increase in

– Power & Fuel cost – Limestone royalty

– Freight cost

• Continued efforts on operating efficiencies

• Arakkonam Grinding Unit commissioned in Dec’00

• Grinding unit at Durgapur under construction, expectedto be commissioned by Dec’01

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Improving Power consumption

FY 99 FY 00 FY 01

ACW 110 105 105

HCW 103 99 92

GCW 83 81 81

APCW 110 88 85

Av. for L&T 99 92 90

NCCL 107 103 97

kwh/MT of OPC

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Cement

Financial Performance FY 2001

FY2001 FY2000 % Change

Sales - Mio. Tons

Domestic 8.95 9.02 (0.8%)

Exports 2.36 1.49 58.4%

Total 11.31 10.51 7.6%

Sales - Rs. Billions. 21.94 19.35 13.4%

Net Realisation - Rs/Ton 1251 1110 12.7%


PBDIT/Sales(incl.Fis.benefits) 19.0% 15.9%

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Other Segments

EBG

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EBG


FY2001 FY2000 % Change

Sales 7.01 6.29 11%


(Rs. Billions)

Di ifi d B i

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Diversified Businesses


(Rs. Billions)

FY 2001 FY 2000 % Change

Sales 3.39 5.07 (49.6%)


•Drop in Sales due to closure of Glass unit till July 2000, transfer of valves

business to E&C and transfer of Pithampur unit to JV with Case

•Drop in margin due to closure of Glass unit - impact Rs. 9 crores

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L&T Infotech

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LTITL back on growth trajectory

• Year of consolidation and growth – Management team strengthened by drawing talents

from L&T

• CMM SEI Level 4 obtained• 60 new customers added

• Several new alliances established with

technology providers

• Focus on domain offering – Telecom, financial services, power and related

utilities, health care, manufacturing

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LTITL

Rs. Billions

FY 2001 FY2000 % Change

Revenue 2.51 1.67 50%

PBT 0.42 0.16 163%

PAT 0.36 0.15 140%

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Summary Results FY 2001

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New Orders Booked

53.05

64.42

76.88 81.46

104.27

0

20

40

60

80

100

120

R s . B

i l l i o n

s

1996-97 1997-98 1998-99 1999-00 2000-01

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Gross Revenues

53.88

57.68

72.92 74.24 78.25

0

10

20

30

40

50

60

70

80

R s . B

i l l i o n

s

1996-97 1997-98 1998-99 1999-00 2000-01

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Order Backlog

43.14

52.52 58.7

68.19

97.6

0

10

2030

40

50

6070

80

90

100

R s . B

i l l i o n

s

1996-97 1997-98 1998-99 1999-00 2000-01

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Segmentwise Revenue

Others

7%Elect.

8%

Cement

26% E&C

59%

FY 2001 FY 2000

Others

4%Elect.

9%

Cement

28% E&C

59%

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Performance Indicators – FY 2001

FY01 FY00 % Change

Order Booking 104.27 81.46 28%

Sales 78.25 74.24 5%

Other Income 2.09 1.75 19%

Total Revenue 80.34 75.99 6%

Cost of sales 70.21 66.03 6%

Operating Margin 10.13 9.96 2%

% to sales 12.9% 13.4%

Interest 3.61 3.32 9%

Depreciation 3.13 2.93 7%PBT 3.39 3.71

Extra ord. 0 0.12

Tax 0.24 0.41 (41%)

PAT 3.15 3.42 (8%)

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Balance Sheet

31-Mar-01 31-Mar-00SHAREHOLDERS' FUNDS

Share Capital 2.48 2.48

Reserves 37.52 36.16

Net Worth 40.00 38.64

LOAN FUNDSSecured Loans 30.02 29.05

Unsecured Loans 12.62 10.69

TOTAL SOURCES 82.64 78.38

Net Block incl. CWIP 46.71 45.89

Investments 8.13 7.74Current Assets 53.36 47.26

Less: Current Liab. 26.00 22.87

NCA 27.36 24.39

Misc. Expenditure 0.44 0.36

TOTAL APPLICATION 82.64 78.38

Rs. Billion

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Prospects FY 2002

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Vivekananda Bridge, Calcutta 4250

Jaipur-Kishangarh Road Project 3000

Road packages-NHAI, State highways 4000

Stadium Projects - Yemen, AbuDhabi, Kuwait 2700Rupsa Bridge, Bangladesh 1000

Race Track at Calcutta 1000

Water Supply Project, Oman 700

E&C Order Prospects

Rs.Million

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Outlook for Fiscal 2002 - E&C

• Environment continues to be tough with

limited opportunities

• Current Order Backlog in excess of Rs. 95 bn• Good order booking prospects in power,

infrastructure and refinery segments

– Timing uncertain

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Outlook for Fiscal 2002 - Cement

• Volume growth of 8% expected.• Key demand drivers being

– Reconstruction work in Gujarat

– Major concretising projects to be undertaken by NHAI

– Further fiscal benefits extended to the housing sector

• Demand may get a further boost with

– Good monsoon – Improved spending on infrastructure

• Price stability to continue in the medium term

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HR Thrust

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HR Challenges

• Challenge of attracting talent

• Attrition among the professionals, specially engineers

• Need to nurture and retain talent/special skills

• Need to identify and develop future Leaders

• Improve productivity

M lti d t t t Att t & R t i

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Compensation

Increases for young

talent

MLP

CompetenceBuilding

Assessment

Centres

Exceptional

Professionals

Very Good Performers&

Hot Skilled Employees

Career Avenues

Movement to

LTITL

Multi-pronged strategy to Attract & Retain

Talent

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40 MTs 250 MLs

MANAGEMENT LEADERSHIP

PROGRAMME (MLP)

Management Leaders

(Nurturing talent from

within L&T)

Management Trainees

(Taking talent from outside

& nurturing within L&T)

MTS & MLP

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Globalisation Strategy

• Pre – Qualification

• Quality Accreditation

• Country / Region Focus

• Exploit JV relationships

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Prequalification

• HED prequalified with – Refineries and oil & gas companies in Middle

East, Far East, South Africa, Venezuala, Brazil and

USA

– International EPC contractors – Bechtel, Fluor

Daniel, Chiyoda

• E&C prequalified with Petronas, Mobil,

Amoco• Construction group is well recognised in

Middle East

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Quality Accreditation

• Quality certification obtained for export toChina, UK and Europe

• Cement is manufactured to satisfy British andEuropean standards

• ECC’s international operations are ISO 9001certified

• Trained manpower conversant with quality

standards of Australia, UK, Denmark, Germanyand Canada• LTITL operations are SEI CMM Level 4

certified

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Cement Restructuring Update

Cement Restructuring -

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Cement Restructuring -

Current Status

• Due diligence by potential candidates completed

• JV Agreements and other documents are under

discussion with potential candidates

• Binding bids to be received after finalising the

documents

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Thank You

Documents

ammay2001