Analysts Meet -May 2001

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
2

Highlights of FY 2001

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
4

Engineering &Construction

Major Orders Booked -Domestic

Rs.Millions
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

Major Orders Booked -Overseas

Rs.Millions

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

E&C - Financial Performance FY 2001

FY 2001

Rs. Billions
FY 2000 % Change

Order Booking

72.01

53.83

34%

Sales

45.92

43.53

5%

Order Backlog

96.82

70.29

38%

11.7%

13.1%

PBDIT/Sales

Cement

10

Industry review
2% negative growth in consumption
Low infrastructural / development expenditure
Severe drought conditions in certain states
Gujarat earthquake

Prices remained depressed till Nov00

Improvement in prices since Dec00

11

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 Dec00
Grinding unit at Durgapur under construction, expected
to be commissioned by Dec01
12

Improving Power consumption

kwh/MT of OPC
FY 99

FY 00

FY 01

ACW

110

105

105

HCW

103

99

92

GCW

83

81

81

110
99
107

88
92
103

85
90
97

APCW
Av. for L&T
NCCL

13

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%

1251

1110

12.7%

Net Realisation - Rs/Ton

PBDIT/Sales

17.1%

12.5%

PBDIT/Sales(incl.Fis.benefits)

19.0%

15.9%

14

Other Segments

16

EBG
Financial Performance FY 2001
(Rs. Billions)
FY2001 FY2000 % Change
Sales
PBDIT/Sales

7.01

6.29

17.8%

21.1%

11%

17

Diversified Businesses
Financial Performance FY 2001
(Rs. Billions)
FY 2001
Sales
PBDIT/Sales

FY 2000 % Change

3.39

5.07

5.3%

12.7%

(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
18

L&T Infotech

19

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
20

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%

21

Summary Results FY 2001

22

New Orders Booked

120

104.27

Rs.Billions

100
76.88

80
60

81.46

64.42
53.05

40
20
0

1996-97

1997-98

1998-99

1999-00

2000-01
23

Gross Revenues
80

72.92

Rs.Billions

70
60

74.24

78.25

57.68
53.88

50
40
30
20
10
0

1996-97

1997-98

1998-99

1999-00

2000-01

24

Rs.Billions

Order Backlog
100
90
80
70
60
50
40
30
20
10
0

97.6

68.19
52.52

58.7

43.14

1996-97

1997-98

1998-99

1999-00

2000-01
25

Segmentwise Revenue
FY 2001

FY 2000
Others
Elect. 7%

Others
Elect. 4%
9%

Cement
28%

8%

E&C
59%

Cement
26%

E&C
59%

26

Performance Indicators FY 2001

Order Booking
Sales
Other Income
Total Revenue
Cost of sales
Operating Margin
% to sales
Interest
Depreciation
PBT
Extra ord.
Tax
PAT

FY01
104.27
78.25
2.09
80.34
70.21
10.13
12.9%
3.61
3.13
3.39
0
0.24
3.15

FY00 % Change
81.46
28%
74.24
5%
1.75
19%
75.99
6%
66.03
6%
9.96
2%
13.4%
3.32
9%
2.93
7%
3.71
0.12
0.41
(41%)
3.42
(8%)
27

Balance Sheet
Rs. Billion
31-Mar-01 31-Mar-00
SHAREHOLDERS' FUNDS
Share Capital
Reserves
Net Worth
LOAN FUNDS
Secured Loans
Unsecured Loans
TOTAL SOURCES
Net Block incl. CWIP
Investments
Current Assets
Less: Current Liab.
NCA
Misc. Expenditure
TOTAL APPLICATION

2.48
37.52
40.00

2.48
36.16
38.64

30.02
12.62
82.64
46.71
8.13
53.36
26.00
27.36
0.44
82.64

29.05
10.69
78.38
45.89
7.74
47.26
22.87
24.39
0.36
78.38

28

Prospects FY 2002

29

E&C Order Prospects

Rs.Million

Vivekananda Bridge, Calcutta

Jaipur-Kishangarh Road Project
Road packages-NHAI, State highways
Stadium Projects - Yemen, AbuDhabi, Kuwait
Rupsa Bridge, Bangladesh
Race Track at Calcutta
Water Supply Project, Oman

4250
3000
4000
2700
1000
1000
700

30

E&C Order Prospects contd..

Rs.Million

Indian Oil Corporation, Panipat/Mathura/Baroda

Power Plant in Gujarat
ONGC Platform Jobs
BPCL Hydrocracker unit / SRU
ROSA Power

14000
2500
8000
9000
12260

31

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

32

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

33

HR Thrust

34

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

35

Multi-pronged strategy to Attract & Retain

Talent
MLP
Career Avenues
Movement to
LTITL

Compensation
Increases for young
talent

Exceptional
Professionals
Very Good Performers
&
Hot Skilled Employees

Competence
Building
Assessment
Centres

36

MTS & MLP

Management Leaders

Management Trainees

(Nurturing talent from

within L&T)

(Taking talent from outside

& nurturing within L&T)

250 MLs

40 MTs

MANAGEMENT LEADERSHIP
PROGRAMME (MLP)

37

Efforts Towards
Globalisation

38

Globalisation Strategy
PreQualification
Quality Accreditation
Country / Region Focus
Exploit JV relationships

39

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
40

Quality Accreditation
Quality certification obtained for export to
China, UK and Europe
Cement is manufactured to satisfy British and
European standards
ECCs international operations are ISO 9001
certified
Trained manpower conversant with quality
standards of Australia, UK, Denmark, Germany
and Canada
LTITL operations are SEI CMM Level 4
certified
41

Regional Focus
Middle East
South East Asia covering ASEAN and SAARC
countries

42

Cement Restructuring Update

43

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

44

Thank You

45