• OUTLOOK ARENA
  • VIEWS ON NEWS
  • JANUARY 6, 2000

L&T to take up restructuring plan today

The board of Larsen and Toubro (L&T) is to take up a comprehensive restructuring plan at a meeting today. Boston Consulting Group (BCG) has drawn up the restructuring plan.

L & T is the largest engineering, procurement and construction (EPC) company (58% of total revenues) in India. The company also has major business interests in cement (24% of total revenues, capacity 12 mtpa), and software.

Under the plan, BCG has suggested that the company exit nine of its existing businesses while retaining six core operating areas heavy engineering and construction, cement, electricals/electronics, finance and information technology. The core businesses are to be retained either within the company or as joint ventures. The businesses to be exited are packaging and consumerables, medical equipment and closed shoes. The company has also been advised to exit four joint ventures - Tractor Engineers, L&T- Komatsu, EWAC Alloys and Audco India. The sell off of the businesses is expected to raise Rs 30 bn.

The restructuring move is a step in the right direction, as it will bring a semblance of focus into the company. Moreover, the fresh funds raised would help the company in reducing its debt burden and also stepping up investment in its core areas of business. BCG's suggestion to retain the high growth areas of infotech and finance will ensure that L&T has a presence in these areas.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst) 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407