L&T's electrical division to double sales to Rs 8,000 cr

Larsen & Toubro’s electrical and electronics business division (EBG) is targeting to more than double its turnover to over Rs 8,000 crore by 2015, thanks to vibrant activity in India’s power sector to add over 200,000 Mw of installed capacity by the end of the 12th five-year plan.

Last year, L&T had reorganised its business units under various verticals termed as ‘Operating Companies’ (OCs), with its own internal boards, to spur growth and optimise internal resources. The EBG operating company, one among the eight OCs in the re-organised structure, currently generates a turnover of about Rs 3,500 crore. L&T’s total annual turnover is Rs 35,000 crore.

 

“To achieve the target and to scale up capacities, we will invest over Rs 1,000 crore in manufacturing facilities and upgradation of existing capacity,” R N Mukhija, president (operations) and director of L&T told Business Standard.

He said the plan was to grow organically by a minimum of 15 per cent year on year to reach a target of Rs 8,000 crore. Any revenue from new acquisitions will be over and above this target. L&T hopes to garner a minimum one-fourth of its EBG turnover from overseas operations. Tamco, a switchgear company L&T acquired in Malaysia in 2008, will contribute about Rs 2,500 crore to the turnover, he said.

The EBG division offers solutions for the power sector in low and medium voltage categories. The EBG comprises an Electrical and Automation Operating Company, two standalone business units of Medical Equipment and Systems (MED) and the recently divested Petroleum Dispensing Pumps and Systems.

The company is considering a proposal to integrate the EBG division with L&T’s subsidiary, L&T Power, to bring more synergy within the group and leverage internal strengths in power and related sectors. The board of directors is yet to take a decision, said Mukhija. L&T’s EBG division had sales of Rs 2,638 crore in 2008-09 and an order book position of Rs 2,676 crore for 2008-09, according to the 2008-09 annual report.

EAOC’s business comprises of four business units — electrical standard products (ESP), electrical systems and equipment (ESE), metering and protection systems, and control and automation. ESP and ESE have production bases in Powai in Mumbai and at Ahmednagar in Maharashtra, respectively, with additional facilities for ESE and a precision manufacturing centre for tooling solutions at Coimbatore in Tamil Nadu. A control and automation business unit operates from its automation campus in Navi Mumbai, while metering and protection systems is based at Mysore in Karnataka. It also has international presence through manufacturing facilities in Wuxi (China) for switchgear standard products, at Dammam in Saudi Arabia and at Jebel in the United Arab Emirates.

Mukhija said expansion is on at Ahmednagar in Maharashtra to up capacity for medium voltage switchgear products. The company has set up a new manufacturing facility for its MED unit in Mysore.