Analyst Presentation Q3 / 9 M FY1 1 17th Jan 2011 Disclaimer This - PDF document

Analyst Presentation – Q3 / 9 M FY1 1 17th Jan 2011

Disclaimer This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and the target countries for exports, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions with respect to investments, fiscal deficits, regulations, etc., interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company. 17th Jan 2011 2

Presentation Outline Performance Segmental Q3 / 9M FY11 of Key Outlook Performance Analysis Subsidiaries 17th Jan 2011 3

Presentation Outline Performance Segmental Q3 / 9M FY11 of Key Outlook Performance Analysis Subsidiaries 17th Jan 2011 4

Key Highlights – FY11 BTG Factories Com m issioned Salalah ( Om an) I nternational airport order bagged Largest BOT concession w on ( Hyderabad Metro) Factories for Pow er Auxiliaries being set up Shipbuilding ( Kattupalli) & forging ventures on course 17th Jan 2011 5

Performance Highlights Q3 9 M Order I nflow 2 5 % 8 % Sales 4 0 % 2 2 % Order Book 2 6 % 2 6 % 1 6 0 EBI TDA Margins 0 bps bps Recurring PAT 1 6 % 1 8 % 17th Jan 2011 6

Order Inflow & Order Book – 9M FY11 Sectoral Break-up Order I nflow : 4 3 % 3 4 % 6 % 8 % 9 % ` 494. 494. 5 6 Bn Order Book: 3 2 % 3 7 % 1 4 % 1 1 % 6 % ` 1 1 4 8 .8 2 Bn I nfrastructure Pow er Hydrocarbons Process Others I nfrastructure Pow er Hydrocarbons Process Others � Roads & Bridges � Generation � Upstream � Minerals & � Shipbuilding � Ports & Harbours � Equipment � Mid & Metals � Defense & � Airports � Electrification / Downstream � Bulk Material Aerospace � Railways Transmission & � Pipelines Handling � Construction & � Buildings & Distribution � Fertilisers Mining Eqpt. Factories � Valves � Electrical & � Urban Infra Electronic Products � Water � Technology Services 17th Jan 2011 7

Order Inflow & Order Book – 9M FY11 Order 1 % 8 8 % 1 1 % I nflow Geographical Break-up Order 9 2 % 6 % 2 % Book Dom estic Middle East Others Order 3 0 % 5 0 % 2 0 % I nflow Custom er Profile Order 4 6 % 4 0 % 1 4 % Book Public ( I ncl. PSUs) Private Dev. Projects - L&T 17th Jan 2011 8

Performance Summary - Topline % % Change ` Billion Q3 FY11 Q3 FY10 9M FY11 9M FY10 FY10 Change 133.66 177.93 -25% Order Inflows 494.56 457.29 8% 695.72 Order Book 1,148.82 911.04 26% 1,002.39 113.22 80.71 40% Net Sales 284.18 233.00 22% 366.75 10.31 16.32 --- Exports 30.52 48.97 64.46 0.91 0.74 Other Operational Income 2.00 1.53 3.60 114.13 81.45 40% Total Net Revenues 286.18 234.53 22% 370.35 Deferment of Award Decisions seen across sectors Execution pickup witnessed in Infrastructure and power sectors BTG orders have started contributing to revenues Low intake of International Orders in FY10 leading to muted Export Sales in current year 9 17th Jan 2011

Performance Summary – Operational Costs Q3 FY11 Q3 FY10 9M FY11 9M FY10 Particulars % to Total Net % to Total Net % to Total Net % to Total Net ` Bn ` Bn ` Bn ` Bn Revenues Revenues Revenues Revenues 89.61 78.5% 62.56 76.8% Manf., Cons. & Opex (MCO) 219.08 76.6% 180.68 77.1% 6.77 6.0% 5.46 6.7% Staff Costs 20.69 7.2% 17.67 7.5% 5.37 4.7% 3.36 4.1% Sales, adm. & other Exp. 13.75 4.8% 9.34 4.0% 101.75 89.2% 71.38 87.6% Total Operational Costs 253.52 88.6% 207.69 88.6% Increased MCO expenses driven by higher commodity prices and job mix change Majority of Power Sector orders in early stage of execution Staff cost rise led by manpower increase to meet growth Increase in SGA primarily due to increased activity levels and higher cost provisions 17th Jan 2011 10

Performance Summary – Profitability % % Change ` Billion Q3 FY11 Q3 FY10 9M FY11 9M FY10 FY10 Change 12.38 10.07 23% EBITDA 32.66 26.84 22% 48.16 10.8% 12.4% -1.6% EBI TDA Margins 11.4% 11.4% - 13.0% (1.76) (1.34) 31% Interest Expenses (5.11) (3.70) 38% (5.05) (1.28) (1.05) 23% Depreciation (3.63) (2.98) 22% (4.15) 2.47 2.34 Other Income 8.41 6.61 9.10 (3.70) (3.06) Provision for Taxes (10.61) (8.34) (16.21) 8.11 6.96 16% Recurring PAT 21.72 18.43 18% 31.85 Extraordinary & Exceptional 0.30 0.63 1.01 10.94 11.91 Items (Net of tax) 8.41 7.59 11% Profit after Tax 22.72 29.37 -23% 43.76 Quarterly volatility in margins, stable for full period Higher depreciation in line with capex additions Increased interest cost due to higher borrowing levels and rise in interest rates Increase in Other Income primarily due to increase in treasury income and S&A Co. dividend 17th Jan 2011 11

Performance Summary – Balance Sheet I ncrease / ` Billion Dec-10 Mar- 10 ( Decrease) Net Worth 210.06 183.12 26.94 Loan Funds 78.55 68.01 10.54 Deferred Tax Liabilities (Net) 0.99 0.77 0.22 Total Sources 2 89 .6 0 2 5 1 .9 0 3 7 .7 0 Net Fixed Asset 72.02 63.66 8.36 Current Investments 69.51 79.65 (10.14) Invt./ ICDs/ Loans & Advances to 100.88 76.79 24.09 S&A Cos Other Investments 3.04 5.49 (2.45) Net Current Assets 44.15 26.31 17.84 Total Applications 2 8 9 .6 0 2 5 1 .9 0 3 7 .7 0 Support to S&A Cos includes: Gross D/ E: 37% L&T IDPL - ` 7.09 Bn Capex Outlay: ` 10.80 Bn L&T Fin. & Infra Fin - ` 4.72 Bn Segmental NWC stable at 7.5% L&T Power Development – ` 3.11 Bn (% of Sales) L&T Power (MHI JVs) - ` 1.53 Bn Increase in Corporate Current assets ( ` 14.80 Bn) driven by L&T General Insurance - ` 1.46 Bn Road SPVs - ` 1.61 Bn dividend payout Infotech - ` 1.00 Bn 12 17th Jan 2011

Presentation Outline Performance Segmental Q3 / 9M FY11 of Key Outlook Performance Analysis Subsidiaries 17th Jan 2011 13

Segmental Break-up – 9M FY11 Net Revenues Machinery & Others Industrial 1 .6 % Products Engineering (1.1% ) 6 .5 % & (6.3% ) Construction Electrical & 8 4 .9 % Electronics (84.8% ) 7 .0 % (7.8% ) EBI TDA Machinery & Industrial Others Products 2 .1 % Engineering 1 0 .1 % (1.6% ) (10.4% ) & Construction Electrical & 8 0 .6 % Electronics (78.9% ) 7 .2 % (9.1% ) Figures in the bracket indicate corresponding period of the Previous Year 17th Jan 2011 14

‘Engineering & Construction’ Segment % % Change ` Billion Q3 FY1 1 Q3 FY1 0 9M FY11 9M FY10 FY10 Change 117.62 164.65 -29% Total Order Inflows 444.87 418.42 6% 638.99 34.30 0.29 --- Exports 50.82 20.86 29.31 Total Order Book 1,124.98 893.75 26% 983.86 --- Exports 90.49 83.06 71.28 98.69 68.29 45% Total Net Revenues 243.04 198.76 22% 318.42 8.00 14.40 --- Exports 24.23 43.07 56.26 11.48 9.14 26% EBITDA 30.34 24.32 25% 43.39 11.6% 13.4% -1.8% EBITDA Margins 12.5% 12.2% 0.3% 13.6% Net Segment Assets 70.29 66.69 5% 62.91 Aggressive pricing witnessed in Hydrocarbon segment Export order growth driven by Infrastructure and T&D Execution ramp up started for BTG orders. Pickup seen in Infrastructure orders under execution Short term Margin volatility due to increased commodity prices (mainly steel) and job-mix change 17th Jan 2011 15

‘Electrical & Electronics’ Segment % % Change ` Billion Q3 FY11 Q3 FY10 9M FY11 9M FY10 FY10 Change 7.21 6.51 11% Total Net Revenues 20.16 18.30 10% 26.94 0.41 0.66 ---Exports 1.48 1.95 2.74 0.94 0.94 1% EBITDA 2.69 2.80 -4% 4.23 13.1% 14.4% -1.3% EBITDA Margins 13.4% 15.3% -1.9% 15.7% Net Segment Assets 12.04 11.02 9% 11.32 Gradual pickup in Industrial and agricultural demand driving sales Margins affected by sharp spike in inputs costs (mainly silver and copper), drop in exports and competitive price pressures Efforts on for better cost pass-through 17th Jan 2011 16