Committed to the cause of nation building, L&T has always believed in shaping its own future by making the best use of its core strengths of engineering and technology. Leveraging these strengths and aided by a relentless drive to become digitally driven, asset-light and low debt, the organisation today is agile and capable of reacting fast and adapting to sudden changes. At the same time, it has been a responsible global corporate, accountable to society, to the country, and to the planet as well, especially with its multiple initiatives aimed at building a green ecosystem. This unique trait of staying ahead of the curve, while putting up solid performances each year, while adhering to the best possible governance standards, has been inculcated over eight decades. The result is a judicious diversification strategy of the businesses and the selection of risk assessed geographies, which keeps this conglomerate steady even in times of turbulence. This, in fact, explains how your Company managed to achieve impressive financial results in a year which has been a difficult one for the global economy.

Pursuing growth, reducing risk

While EPC Projects continue to account for most of the revenues earned by your Company, the management has balanced the cyclical nature of this business through a steady growth of its Services portfolio over the years. During the year under review, the revenues from the IT&TS businesses came second only to the revenues generated from the Infrastructure Projects segment. Thus, for sustained profitability, the Group will target growth in the EPC Projects, Hi-Tech Manufacturing, and IT&TS businesses.

Geographical diversification has been another vital aspect of the de-risking strategy. While India continues to be your Company’s primary market for EPC Projects, Hi-Tech Manufacturing and the Financial Services businesses, your Company’s EPC arm has become active in geographies such as the Middle East, Africa, and ASEAN, while the Americas and Europe continue to be the primary geographies for the IT services businesses.

To stay up to date on the rapidly changing technology front, the Group has partnered with several large global process licensors and technology licensors to improve the scope of business offerings for the Hi-Tech Manufacturing and EPC Projects businesses. For the IT&TS businesses, the Group has forged strategic partnerships with established global software product and technology companies.

While the mature businesses continue to be a steady source of cash generation, your Company also has an eye on the future and is therefore seeding and scaling up new tech-driven businesses which have high growth potential, are asset-light, and deliver high financial returns.

Financial performance

During the year under review, your Company set several new milestones. For the first time ever, your Company notched annual Order Inflows of more than ₹ 2 lakh crore. Consequently, the Order Book of the Company today stands at a record high of ~ ₹ 4 lakh crore which, apart from being well diversified, also provides a multi-year revenue visibility. The Group revenues stood at ₹ 1.8 lakh crore for the year, registering a growth of 17% year-on-year - the best achieved in the last five years. This has been the outcome of a strong execution momentum in the Projects and Manufacturing portfolios and a healthy growth in the IT and TS businesses. The Group's operating PAT for the year, at ₹ 10,374 crore, grew by 21% year-on-year.

The market capitalisation too crossed a crucial threshold of ₹ 3 lakh crore during the year. The financial performance, strong Order Book position and the growth strategy have enabled the market capitalisation to cross this crucial threshold.

Strategic moves

Adapting to new-tech is now a way of life at your Company. The drive to digitalise the processes has shown what new-tech is capable of in the field of infrastructure projects – right from the conceptualisation to project delivery to post commissioning i.e., O&M. As India’s leading infrastructure player, your Company had embarked on the digital journey way back in 2016, and now we are enjoying the benefits first hand. Project execution has become faster, safer, cleaner, more accurate, and most importantly, more economical.

On the IT Services business front, one notable development during the year has been the successful merger of the Group’s two listed IT companies – LTI and Mindtree – with complementary domain expertise. With a combined annual revenue of over USD 4 billion, LTIMindtree now possesses the scalability of a Tier 1 company, while retaining the agility and flexibility of a next Tier company. Now, with the advantage of size, LTIMindtree can vie for projects from Fortune 1000 players who prefer to work with such scale players. In addition, the merger has opened huge scope for forging synergies, expanding outlook and outreach, and even developing cross-vertical expertise by leveraging the parent brand L&T’s multi-sector presence.

The decision to divest a portion of the Smart World & Communication (SWC) business to L&T Technology Services (LTTS) is aimed at creating synergies and transforming SWC into a global solutions player in the domains of Digital, IoT, 5G, Cyber Security, Data Center and Cloud, Analytics, etc., by effectively leveraging LTTS’s global presence.

On the Financial Services front, L&T Finance Holdings (LTFH), a listed subsidiary, is forging ahead on its stated path of 'retailisation' of its lending book.

The Company strives to achieve low gearing levels by exiting non-core and sub-scale businesses. LTFH concluded the sale of the mutual fund business to HSBC Asset Management (India). In another move, L&T entered into a share purchase agreement with Edelweiss Alternatives, to sell its entire 51% stake in L&T Infrastructure Development Projects Limited, a joint venture having multiple toll road concessions and a transmission line asset it its portfolio. Accordingly, the investment in the joint venture has been classified as ‘held for sale’, pending receipt of necessary approvals.

All these moves are aimed at portfolio reorganisation with an increased emphasis on participating in energy transition, while gearing up for the future.

The importance of adopting sustainable practices while creating long-term assets has been ingrained in the DNA of L&T by its founding fathers. L&T has imbibed these values and wherever it worked, it left a firm imprint in terms of improving the surroundings and the living conditions of the local populace.

Social initiatives

A firm believer in fostering inclusive growth and in building long-term relationships with all stakeholders based on mutual trust and respect, your Company has undertaken CSR initiatives which have benefitted more than 15 lakh people. During the year under review, your Company carried forward that tradition, and spent over ₹ 140 crore, focused on initiatives pertaining to health, education and skill development, and targeted interventions in the areas of agriculture, water, and sanitation. It is not just the amount spent that sets your Company apart, it is the manner in which it is done – focused, integrated, geared for the long-term, and aimed at empowering people.

Circular economy

During the year, your Company has always practised optimal utilisation of resources and ensured minimum wastage. Your Company ensured that non-virgin and eco-friendly materials accounted for 24% of the total materials used during the year.

Green initiatives

While the global movement towards the transition to a green economy is gathering momentum now, your Company has always taken good care of environmental preservation in all the projects and ventures it has undertaken. Being in the kind of businesses which involve substantial consumption of energy, water and commodities, your Company has consciously worked towards optimal resource utilisation so that the impact on the environment is minimal. Enhancing the green cover around the projects where your Company operates and within the campuses has been a long-standing tradition. During the year under review, your Company had planted a total of 1.9 million saplings, taking the cumulative number of saplings planted till now to more than 8 million.

How serious your Company is about the environment is evident from the ambitious targets it has set for itself – of achieving Water Neutrality by 2035 and Carbon Neutrality by 2040.

During the year, the carbon-dioxide (CO₂) emission avoided by your Company stood at 29,116 tCO₂e, and the use of renewable energy as a percentage of the total energy consumption mix stood at 9.6%.

However, standalone initiatives can achieve little in lessening the impact on environment. More companies need to join the green transition movement. What is good for the planet is also good for the balance sheet, if one has a long-term perspective. Armed with this belief, your Company has not only introduced environment innovations in its own businesses, but also helps its customer-companies/organisations to go green – be it in terms of wastewater management and water treatment, or engaging with the green economy at multiple levels – from manufacturing electrolysers and storage batteries to EPC execution of green hydrogen plants. There will, of course, be a gestation period before green begins to show major results, but your Company is in it for the long haul, and realises that bringing about change in the economy and industry needs time, patience, and perseverance – qualities which L&T embodies.

Future focus

Anticipating the future, especially from a national perspective, has been your Company’s USP, and this has often kept us ahead of our peers and contemporaries. Some of the initiatives which your Company had started were way ahead of their times, but gradually they have started bearing fruit.

Under the Hi-tech Manufacturing vertical, your Company has invested considerable time and resources in developing precision engineering capabilities, especially for India’s space programmes and defence initiatives. These businesses picked up slowly and gradually gained traction. In Defence programme manufacturing and system integration, manufacturing activity is now poised to witness a major uptick under the Government’s indigenisation drive.

The two e-commerce digital platforms, SuFin and EduTech, hold a lot of promise. Serving the MSMEs in construction and industrial products being the focus area for SuFin, this B2B platform is likely to witness significant traction as and when the economic recovery becomes

more broad-based. EduTech’s ability to create customised content for delivering engineering and technology knowledge makes this platform unique vis-à-vis its peers and it caters to a niche segment. As the digitalisation drive gathers momentum pan-India, the demand for content on technical courses is likely to explode and then EduTech is likely to emerge as a major player.

The demand for data centers will expand as the digitalisation drive gathers momentum. In this regard, the formation of Cloudfiniti is aimed at offering cutting edge technology solutions through the state-of-the-art data centers and cloud infrastructure.

Your Company’s green energy business is another such initiative whereby your Company is getting ready to ride the global green transition wave by developing Green Hydrogen project installation / EPC capability and setting up manufacturing facilities for electrolysers and battery cells. In this regard, your Company is also exploring technical collaborations with global players in this field. The signing of a binding agreement with McPhy Energy, a France-based leading electrolyser technology and manufacturing company, has taken us one step ahead towards setting up GW-scale manufacturing facility in India to serve the domestic requirements as well as cater to the other markets. The formation of a Green Energy Council with global experts also augurs well for your Company’s initiatives.

The digitalisation drive, which was started with the aim of enhancing the future-readiness of the Company, is now a pan-organisation movement, and the benefits are already visible.

People power

People across the organisation are our only true assets and means to achieve goals that we have drawn for ourselves. People power continues to be crucial even when there have been tectonic shifts on the technology front.

It has been a constant endeavour of your Company to provide its employees a conducive work environment that helps them deliver their best. The culture of learning and development carefully fostered by your Company has continuously encouraged the employees to enhance their skill sets and expand their domain knowledge. Staying abreast of technological advancements is equally important today. After all, tomorrow’s innovations are shaped by how well human intellect can leverage the power of technology. In this regard, your Company has made available online multiple digital platforms with rich content on self-improvement courses. It is very heartening to note that during the year more than 3.36 lakh hours of learning was clocked by over 26,000 employees on these platforms.

The use of technology is taken a step further to train workers. Simulation-based training through the use of VR / AR is provided to workers for handling of specialised equipment and for making them accustomed to unknown terrains and work conditions.

Aligned with the Company’s Zero Harm policy, all work sites are ISO 45001-certified. To enhance the standard of safety and hygiene at the project sites and shop floors, technology has been put to good use. Hazardous jobs are now getting assigned to machines and robots. Workplace safety violations get spotted and corrective actions are taken quickly. Your Company is now also making use of sensors and beacons to detect changes in altitude, temperature, and other environmental conditions, and to monitor vitals such as heartbeat, pulse rate, blood pressure and fatigue, so that mishaps can be pre-empted. In addition, rigorous safety training drills are held to sensitise workers.

Committed to take the percentage of women in the total employee strength to 10% by 2026, your Company has hired more than 1,900 women during the year.

L&T has always been and continues to be recognised as a Great Place To Work (GPTW).

A lot more to do!

The final scorecard does make for a happy reading. We are looking good across all parameters - performance, prospects, and people. And all these are continuously monitored and reviewed under the 4th 'P' – planning, through the Lakshya initiative. The task of nation building puts a lot of responsibility on us. We need to re-dedicate ourselves, refine our processes, reinforce our skillsets, and establish our credentials as a tech-driven engineering and solutions conglomerate. The future certainly holds a lot of promise and excitement. It is our humble duty to seize the opportunities and embark on this new phase of growth.