Larsen & Toubro - Restarting its Construction Sites

Sarika Anand Sarika Anand
Nov 24, 2020 8 min read
Larsen & Toubro - Restarting its Construction Sites

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Larsen & Toubro Limited, commonly known as L&T, is an Indian technology, engineering, construction, manufacturing and financial services, with global operations, headquartered in Mumbai, Maharashtra, India. The company has business interests in basic and heavy engineering, construction, realty, manufacturing of capital goods, information technology, and financial services.

L&T is engaged in core, high impact sectors of the economy and our integrated capabilities span the entire spectrum of โ€˜design to deliverโ€™. With 8 decades of a strong, customer focused approach and a continuous quest for world-class quality, we have unmatched expertise across Technology, Engineering, Construction, Infrastructure Projects and Manufacturing, and maintain a leadership in all our major lines of business.

Larsen & Toubro - Company Highlights

Startup Name Larsen & Toubro Limited
Headquarters Mumbai, India
Industry Conglomerate
Founders Henning Holck-Larsen, Sรธren Kristian Toubro
Founded 7 February 1938
CEO S. N. Subrahmanyan
Website www.larsentoubro.com

Larsen & Tourbo - About and How it works ?
Larsen & Toubro - Logo and its meaning
Larsen & Toubro - Founder and History
Larsen & Toubro - Mission
Larsen & Toubro - Business Model
Larsen & Toubro - Revenue
Larsen & Toubro - Investments
Larsen & Toubro - Acquisitions
Larsen & Toubro - Competitors
Larsen & Toubro - Challenges Faced
Larsen & Toubro - Future Plans

Larsen & Tourbo - About and How it works ?

Larsen & Toubro Limited (โ€˜Larsen & Toubroโ€™ or โ€˜L&Tโ€™) is a USD 17 billion technology, Indian technology engineering, construction, projects, manufacturing and financial services conglomerate, with global operations. It addresses critical needs in key sectors โ€“ infrastructure, construction, defence, hydrocarbon, heavy engineering, power, shipbuilding, aerospace, electrical & automation, mining and metallurgy.

Three key products/services which L&T is engaged in are: Construction and project-related activity, manufacturing and trading activity, and engineering services.

For administrative purposes, L&T has been structured into five broad categories:

  • Construction โ€“ this covers Buildings & Factories, Heavy Civil Infrastructure, Transportation Infrastructure, Power Transmission & Distribution, Water & Effluent Treatment, Metallurgical & Material Handling and Smart World & Communication;
  • EPC Projects โ€“ this includes Hydrocarbon Engineering, Power and Power Development;
  • Manufacturing โ€“ this includes Defence Equipment & Systems, Heavy Engineering, Construction, Mining & Industrial Machinery, Industrial Valves and Electrical & Automation Systems;
  • Services โ€“ this includes Realty, Information Technology, Technology Services and Financial Services.
  • Others โ€“ this includes Hyderabad Metro, Infrastructure Development Projects and corporate functions

Larsen & Toubro - Logo and its meaning

The L&T logo comprises its monogram that is in blue colour.

L&T logo
L&T logo

Larsen & Toubro - Founder and History

Larsen & Toubro originated from a company founded in 1938 in Mumbai by two Danish engineers, Henning Holck-Larsen and Sรธren Kristian Toubro.

Founders of L&T
Founders of L&T

The company began as a representative of Danish manufacturers of dairy and allied equipment. However, with the start of the Second World War in 1939 and the resulting blockade of trade lines, the partners started a small workshop to undertake jobs and provide service facilities. Germany's invasion of Denmark in 1940 stopped supplies of Danish products. The war-time need to repair and refit and degauss ships offered L&T an opportunity, and led to the formation of a new company, Hilda Ltd, to handle these operations. L&T also started to repair and fabricate ships signalling the expansion of the company. The sudden internment of German engineers in British India (due to suspicions caused by the Second World War), who were to put up a soda ash plant for the Tata's, gave L&T a chance to enter the field of installation.

After India's independence in 1947, L&T set up offices in Calcutta (now Kolkata), Madras (now Chennai) and New Delhi. In 1948, 55 acres of undeveloped marsh and jungle was acquired in Powai, Mumbai. A previously uninhabitable swamp subsequently became the site of its main manufacturing hub. In December 1950, L&T became a public company with a paid-up capital of โ‚น20 lakh (US$28,000). The sales turnover in that year was โ‚น1.09 crore (US$150,000). In 1956, a major part of the company's Mumbai office moved to ICI House in Ballard Estate, which would later be purchased by the company and renamed as L&T House, its present headquarters.


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Larsen & Toubro - Mission

Larsen & Toubro's mission statement says, "To develop and deliver high quality education and research in project management in consonance with the vision of L&T by providing state-of-the-art infrastructure and learner friendly atmosphere with innovative pedagogy thereby creating a pool of world-class and socially responsible project professionals."

Larsen & Toubro - Business Model

  • Customer Segments : L&T has a niche market business model, with a specialized customer segment. The company targets its offerings at firms that operate in the industrial sector.
  • Value Proposition : The company creates accessibility by offering a wide variety of options. It is a multinational, diversified conglomerate, operating in numerous product/service categories including technology, engineering, construction, manufacturing, and financial services. The company has established a strong brand due to its success. It is one of the five biggest fabrication companies in the world, with more than 130 subsidiaries and 15 associate firms. It bills itself as Indiaโ€™s largest engineering and construction company and one of its largest multinational firms.
  • Channels : L&Tโ€™s main channel is its business development team. The company promotes its offerings through its website, social media pages, advertising, and participation in conferences.
  • Customer Relationships : L&Tโ€™s customer relationship is primarily of a personal assistance nature. The company provides comprehensive training to customers as well as extensive phone and e-mail support
  • Key Activities : L&Tโ€™s business model entails designing, developing, and manufacturing its products, as well as offering services to customers.
  • Key Partners : L&T maintains technology alliances (e.g., joint ventures) with various firms to provide best-in-class services for its customers. The firms represent various sectors, including Power, Construction, and Hydrocarbon. Specific partners are GULF Interstate Engineering, Chiyoda Corporation of Japan, Mitsubishi Hitachi Power Systems (MHPS), Sargent & Lundy, and Valdel.

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Larsen & Toubro - Revenue

L&T has two revenue streams: revenues from the sales of its manufactured goods and revenues from contracts established for the provision of services.

Larsen & Toubro - Investments

Larsen & Toubro Limited has invested in City Union Bank on Dec 1, 2006. This investment - Post-IPO Equity - City Union Bank - was valued at โ‚น450M.

Larsen & Toubro - Acquisitions

Larsen & Toubro Limited has acquired 2 organizations. Their most recent acquisition was MindTree on Jun 3, 2019.

Acquiree Name Date Amount About Acquiree
MindTree Jun 3, 2019 - MindTree was started in 1999 by a diverse team of 10 professionals who came from three different nations and had already scripted
Spectrum Infotech Feb 3, 2006 - Spectrum Infotech is a computer software company

Larsen & Toubro - Competitors

L&T's top competitors are Reliance, Aditya Birla Group, Tata Projects, GMR Group, LANCO Group, SPCL, PEL and Afcons.


Reliance Industries Limited Success Story [Case Study]
Reliance Industries Limited (RIL) is an Indian organization headquartered inMumbai, India. Reliance has its entities across domains like vitality,petrochemicals, materials, common assets, retail, and broadcast communications.Reliance is one of the most prominent businesses in India, the biggest โ€โ€ฆ

Larsen & Toubro - Challenges Faced

Labour shortage : Larsen and Toubro (L&T) is looking to re-start work at its construction sites with the easing of the lockdown, Indiaโ€™s largest engineering and construction firm is facing an acute shortage of labour as over one lakh workers โ€” almost half its labour โ€” have gone to their homes in U.P., Bihar, Jharkhand, West Bengal and Orissa during the lockdown.

The company has restarted most of its factories and about 90% of the 1,000-odd project sites with almost half of the labourers, but execution remains a challenge.

When asked for comments about the migrant labours crisis, S N Subrahmanyan, MD and CEO, L&T, told, โ€œWe had 2.25 lakh labourers working with us pre-Covid; now we have 1.2 lakh people with us. We need to get back one lakh people to resume operations.โ€

L&T is also banking on onboarding numerous labourers coming from the Gulf region who have been laid off due to the significant fall in the oil prices.

Larsen & Toubro - Future Plans

Larsen & Toubro (L&T) is a few months away from its 'Lakshya 2021' business plan, where it set a Rs 2-trillion revenue target. S N Subrahmanyan, chief executive officer and managing director of the company, told Amritha Pillay and Dev Chatterjee that he was still positive about meeting the target.

Larsen & Toubroโ€™s Chief Executive Officer SN Subrahmanyan walks across to a โ€œcontrol roomโ€ in his Mumbai office to get real time data from 400 sites that the company is operating miles away, down to how much fuel a particular machinery is guzzling or what weight is being lifted by a crane at a construction site. The company has built an in-house digital platform that gives seamless connectivity to its diverse operations and helps it improve efficiency and reduce time taken for decisions.

L&T is taking this initiative to the next level with its new strategic initiative, appropriately called โ€˜L&T-Nxtโ€™, which will use new technologies, digitization and analytics to commercially provide industrial solutions by tapping on opportunities as companies move towards โ€˜Industry 4.0โ€™.

โ€œWe are committing significant investments and talent into this strategic effort and are confident that this will be an enabler for business,โ€ SN Subrahmanyan, CEO and managing director, said.
"L&T-Nxtโ€™ will focus on the areas of artificial intelligence (AI), internet of things (IoT), virtual reality, augmented reality, geospatial solutions and cybersecurity to offer automation solutions to industrial clients by leveraging its diverse customer base and domain knowledge expertise."
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