How L&T started some businesses, sold others, and navigates a stormy world

Considering the US tariffs and the general variable global environment, how much do you think the international business is at risk?

Some of these problems are very big for me. The way you need to look at, where you are, can you find a job? And do you have a positive perspective? Wherever we are, we look good and seem to have a positive perspective. Some businesses have a supply chain, logistics and trade problems for various reasons. In the end, I feel that rationality will be valid and most of them will be solved. Because the world has to do business and economies have to find their own foundations.

In addition to geopolitical problems, there are other major changes, including the emergence of AI. How does L & T travel them?

I mean, it’s an opportunity, right? A few years ago, when it was digital, it was an opportunity we mentioned in the same melody as AI’s speech today. And fortunately for us, then it was Mindtree. When LTI and Mindtre came together, we had a very comprehensive combination of knowledge and traditional knowledge that created remarkable wonders. Similarly, AI is in the same area today. Today, more than 400 algorithms are written in the company. Approximately 37 people have already been applied in L & T and many are written to be applied. Some are written from the customer’s point of view.

Could you look at a MindTree -like acquisition for artificial intelligence skills?

There is a leadership there (to call it). M & E is not easy, isn’t it? It’s like combining the two -hour company. We were lucky with Mindtre, because LTI was located in some sectors such as Banking, Insurance, Oil and Gas, Production and Cethera, while MindTree was in retail, high technology, travel, hospitality, airlines and others. So, there was no important resource. Even with this kind of situation, it required a lot of energy and effort to bring them together. What I’m going to encourage them to look at them is the purchases of Tuck. There are always a technology, a customer or private people to get. We continue to do this quite often and we will continue to do so. But when I look at any big purchase, I have nothing in my mind, and I don’t think my colleagues have anything in mind right now.

What is your new five -year strategic plan? Will L&T be a big makeup?

So, the last year of this previous strategic plan. It was a four -year plan because of Covid. We did well. We overcome the strategic plan in almost all parameters. So, this gives us a lot of confidence by looking at the next five years. I can’t comment too much because the new plan has not yet been concluded and we have to take it to the board, confirm and then announce it. We are extremely positive. People are only willing to go. Bright ideas come out. We do not show much diversity, but it is experiencing a lot of investment in the areas we are in. We look at both India and the Middle East. Maybe there will be another geography.

You enter new businesses such as green hydrogen and semiconductors. What is strategy here? When do you see that they stop being cost centers and contribute to the lower line?

As the company develops and the market develops, some businesses that we commodify or face intense competition. There is also the possibility that someone can do this better. So, as we progress, we move away from some businesses. For example, we out of industrial electrification. We out of the use of materials. We put filters in businesses-we do not do certain size work in certain areas.

At the same time, when we close some businesses, for us in the top management, it is very important to sow the seeds of something that can become a business that has a value tomorrow. Therefore, we have four important observations. Number one Realty Business. It was more started as the ability to make money from our own lands. Then the idea came, why don’t we make it a job? So, if this business grows, this is a business for the future.

Secondly, semiconductors-were paying attention that we were looking. My opinion was always to enlarge a little faster than engineering, supply and construction (EPC) business, including production. EPC margins are slightly lower than a simple reason to include raw materials and things I haven’t done; I can’t buy someone’s cement and I can’t make 20% in construction. It doesn’t work. In other words, EPC margins are always 5-6% and services are 15-17%. Keeping this in mind is how we enter the semiconductor design. We don’t have deep pockets to do all this. And therefore, in our vehicles, I think your design is a good bet to get. So, let’s see how it goes, and if it does well, it is a good addition for the future.

Third, if you look at L&T, it has been an energy company for decades. And therefore, if we need to restructure ourselves and look at the future, one of the areas is green energy. We haven’t entered solar energy for various reasons and now it’s too late to get into this business. We said, we will focus on a few green energy fields. So we chose electrolystrors, because we are traditionally manufacturers and felt that we can make efficient electrolysis. We made India’s first electrolysis with 0.5 megawatt capacity. Now we’ve done one more and we’ll do 4 megawatts shortly before September. In the meantime, the Indian government, all hydrocarbon companies, especially refineries, to look at the green hydrogen to look at a significant extent emerged with this policy. Thus, IOCL Panipat came out with the first tender we were lucky to win. And now, we will build one of the world’s largest hydrogen plants.

The fourth field data center job we look at very seriously. We were doing data centers for other companies. And the idea, with all our knowledge, why don’t we look at the data centers ourselves? We decided to look at data centers and cloud services above. We built two data centers in Mumbai, which were small and slightly larger in Kanchipuram. And then, we have invested in a company called E2E, a GPU Cloud Services company, towards cloud service businesses.

In terms of technological capabilities, how do you compare L&T with a Chinese company?

Look, in terms of technology, we are equal or a little better. But our execution is still not so good. Whatever the reasons, our efficiency levels are not so good. You cannot only blame staff and workers. There are many, many factors. Rights of the roads, gaps, the right thing existing, excellent planning, as he said. And some of them will come with volumes. I think as the economy develops and such opportunities come, I think it will replace all this. I saw it myself. If you do something, it takes a long time. If we do the same 100 times, suddenly all productivity factors, everyone’s working way, planning, planning, logistics, supply chain, everything sits in place.