Interview with Mr A M Naik, Group Executive Chairman, Larsen & Toubro

Summary

ARC Advisory Group had the opportunity to interview Anil Manibhai Naik, Group Executive Chairman, Larsen & Toubro (L&T) during his recent visit to the US. The organization is one of the most admired companies in India with a reputation for its capabilities in executing large engineering, procurement, and construction (EPC) projects in key sectors as well as manufacturing critical products, equipment and systems. As we learned during the interview, Mr. Naik has led a broad, transformational process across the organization that has boosted shareholder value.

Larsen & Toubro

Founded in India in 1938 by two Danish engineers, Larsen & Toubro Limited is a multinational conglomerate headquartered in Mumbai, India. The company is engaged in technology, engineering, construction, manufacturing and financial services. Described by the media as 'the builder of the India of the 21st Century', L&T has been involved in many of the biggest and most prestigious projects in the country. The L&T Group has over 65,000 employees globally, and $14 .3 billion revenue per the March 2014 annual report.

In 2010, Mr. Naik championed an organizational restructuring to facilitate aggressive growth through greater levels of empowerment while also increasing accountability. The new organizational model has enabled the Company's businesses to respond successfully to emerging opportunities and challenges.

L&T Infotech

Mr. Naik started L&T Infotech in 2001 with 500 professionals. One motivation for the engineering and IT services business was to retain talent for the core L&T business. Too many capable people were leaving to join rapidly growing global service providers. . The first big customer of the company was Motorola, which later became Freescale. Mr. Naik is fond of the L&T Infotech business - he helped start up this group by making sales calls on its behalf.

L&T Infotech now has 17,500 employees globally. In 2013, it had $900 million in revenue. It looks to break $1 billion this year, with growth currently running at 20 percent. This now-global IT services and solutions provider has a deep domain understanding and their connection to business systems. Clients cover a broad range of industrial segments including automotive, aerospace, CPG, life sciences, utilities, hi-tech, industrial machinery, chemical, and oil & gas.

Conclusion

Mr Naik is among the most distinguished leaders in corporate India. National and state honors include the Padma Bhushan and the Gujarat Garima. Major US business magazines have featured Mr. Naik among the world's best performing CEOs. Other honors in a long list include The Economic Times Business Leader of the Year Award and CNBC Asia's Outstanding Business Leader Award.

Mr. Naik has worked for L&T nearly 50 years starting as a junior engineer and advancing to Chairman in 2003. He has successfully led the Company through some of its most challenging times and enabled it to emerge stronger. The company has expanded from predominately an India business to become a global participant, something that ARC believes we will see more of as more companies in India increase the scope and sophistication of their offerings to meet the requirements of global customers.

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Keywords: Larsen & Toubro, Engineering Services.