L&T: Quest For Excellence
What’s common among the Lotus Temple in Delhi, ATC towers at Mumbai and Delhi airports, ICICI Bank building in Mumbai, Cyber Towers in Hyderabad, Wankhede Stadium, Kempegowda Airport and Statue of Unity? They all have been built by Larsen & Toubro (L&T), one of India’s construction behemoths. A constant presence in BW Businessworld’s Most Respected Companies list, this year it has been placed eighth in the rankings.
A highly diversified engineering and construction conglomerate addressing different segments of infrastructure and industry, L&T has been a consistent performer over the past eight decades not just in terms of business growth but also shareholder value. In fact, L&T’s record in paying dividend to its shareholders is a benchmark for the industry.
S.N. Subrahmanyan, CEO and MD, L&T attributes the company’s stellar performance and resilience to its people and work culture which is centred around customer satisfaction, innovation and excellence at work, particularly execution.
“This unique DNA of the company and the fabric of its culture has helped L&T in retaining its position of pre-eminence and in attracting the best talent,” says Subrahmanyan.
Mumbai-based L&T has kept pace with technological developments as well as the evolving needs of the nation across all its business interests including engineering, construction, manufacturing, information technology, and financial services. It addresses critical needs in key sectors such as hydrocarbon, infrastructure, power, process industries and defence in over 30 countries around the world.
Lavina Quadros, SVP — Equity Research (Capital Goods, Logistics, Utilities) at Jefferies India says, “L&T’s sector and geographical diversification has ensured it grows faster than the market even in a difficult environment. Strong brand equity associated with quality work and balance sheet are the icing on the cake. It is definitely an enviable company to work at because the exposure given the company’s diversification will be one of a kind.”
L&T follows among the best safety standards in the Indian construction industry, which does give a benchmark for other companies to follow. Construction is one of the largest employment sectors in India.
“The top management’s vision and endeavour to grow profitably and not at the cost of balance sheet and margins is its biggest asset. To sum it, transparency and investor friendly are the key positives of the company,” says Quadros.
L&T, without doubt, is the best technology enabled EPC company in the country, with capabilities of executing any type of Infrastructure asset. It has been always been the first to build critical assets such as nuclear power plants, airports, Metro, irrigation projects, bridges, etc.
According to Vijay Agrawal, Executive Director, Equirus Capital, L&T has developed capabilities over time by following the process of continuous skill upgradation. “The company has invested in manpower and technology ahead of others. This helped it to increase profitability by achieving efficiencies in operations and cost reduction. They are able to get orders at better margins. Hence the company has been able to outperform the market,” says Agrawal.
The organisation follows a gender-neutral policy of hiring and developing the best talent, and is rated high as a safe place to work for women since it has strong internal checks and balances to protect the dignity of its women employees.
The company is currently working on several defence projects and helping the nation to achieve domestic manufacturing capabilities.
The conglomerate’s different businesses like civil EPC, oil & gas, defense, airports, Metro, etc. under independent management teams have become independent growth drivers. Each of these businesses are much larger than the total turnover of competitors.
“L&T is also focused on identifying new opportunities and investing early. This has helped it to achieve faster growth than its competitors,” says Agarwal.
