Group Chairman's Address - 77th AGM

Dear Shareholders,

Robust self-belief and resilience are the key to success in times of uncertainty and challenge. This spirit has helped India contend with an unprecedented pandemic and a war in Europe with its attendant disruptions. It is creditable that amidst these macroeconomic and geopolitical upheavals, India has managed to stay the course in its quest for growth. Your Company too has performed well while operating within the given constraints.
At this juncture, we wish to reiterate our commitment to advance the interests of our country and express our solidarity with the nation and its leadership. 


Structural Reforms Pave the Way 

FY 2021-22 was an economic roller-coaster with the impact of recurring bouts of COVID-19 and global disquiet counter-balanced to some extent, by the country's economic resilience. Regular Government spending throughout the year complemented by an accommodative policy pursued by the RBI, prevented the risk of an economic meltdown and helped bolster the confidence of households and corporates.
An improved borrowing programme for the Centre and State Governments also meant that the spending proposals envisaged in the Budget continued unhindered. Most of the high-frequency, economic mobility and service indicators gained momentum as the easing of pandemic curbs saw demand regaining lost ground before geopolitical tensions  set the clock back once again.

After years of stagnation, India witnessed a pick-up in exports in FY 2021-22. Consequently, the economy expanded at 8.7% in real GDP terms vis-à-vis a contraction in the previous financial year.
India is expected to post top quartile growth among emerging nations in the medium term. Challenges on the horizon include runaway oil prices, supply chain disruptions and the US rate hikes affecting capital flows into India. Despite these roadblocks, our view is that the bold structural reforms carried out by the Government in the last couple of years will lead to a higher trajectory of growth. 

Infrastructure Investments Drive Growth

India's FY 2022-23 Budget focuses on consolidation with a capex-driven infrastructure thrust. Most of the initiatives undertaken, ranging from NIP to NMP, creation of DFI, the PLI scheme, the public procurement initiatives as well as the renewed PPP models, have an overarching infrastructure focus. We hope that a stable domestic macro- environment and an equable socio-economic climate will enable the Government to realise the vision envisaged in the NIP blueprint. Public and private investments working in tandem should also resuscitate India's Investment / GDP ratio. 

As on March 31, 2022, the Order Book at 357,595 crore is large, growing and diversified. The Group has repaid borrowings during the year and significantly improved its Debt: Equity ratios.
Your Company continues to focus on shareholder value creation by divesting non-core assets, capturing cost efficiencies and leveraging technology for productivity gains. It gives me great pleasure to inform you that the Board of Directors has recommended a final dividend of 22 per share for FY 2021-22.

International Business
While the Middle East remains a region of focus, your Company has expanded its outreach to several countries in Africa and South East Asia. Currently, the Middle East constitutes 76% of the international Order Book of  95,227 crore.

Strategic Plan Roll Out

This year we launched Lakshya 2026, built around the following themes:

  • Value accretive growth in our current business portfolio
  • Exit of non-core businesses
  • Developing innovative business offerings to ride the energy transition wave
  • Scaling up digital and e-Commerce businesses
  • Business sustainability through sharper focus on ESG and shareholder value creation

We are targeting Group revenues of 2.7 trillion and ROE of 18%+ by FY 2025-26

Talent Management

People are at the heart of our successes and our continuing endeavours to do better. Our HR policies are crafted to ensure professional growth, while contributing to the employee's sense of pride and well-being.

Water Neutrality & Carbon Net Zero Target

We have published the maiden issue of our Integrated Annual Report, bringing together financial and sustainability performance across multiple parameters. We have been at the forefront of many sustainability initiatives and our Reports are accessible on the Company's website. Your Company has set a Water Neutrality and Carbon Net Zero target of 2035 and 2040 respectively. We are already present in the EPC Solar and Water space and are now actively looking at expanding our footprint in Green Hydrogen and Energy Storage.
With regard to governance, the Company’s core values pivot around the principles of independence, transparency, accountability, responsibility, compliance, ethics and trust. We will continue to uphold these values – the hallmark of L&T.
I reiterate that our defence business does not manufacture explosives or ammunition of any kind, including cluster munitions or anti-personnel landmines or nuclear weapons or components for such munitions. The business also does not customise any delivery systems for such munitions.

Positive Outlook

There is good news on the technology front. It took a pandemic to open our eyes to the latent benefits of digital technologies. Also, IT spends are possibly the only deflationary force in today's inflationary world.
Another positive result has been a heightened awareness of sustainability and a more rigorous emphasis on environment protection, social responsibility and governance frameworks.
I thank our employees, customers, supply-chain partners and the Government for their contribution to our growth. I also thank my fellow Board Members for their support in guiding the Company through turbulent times. My special thanks to our shareholders for the trust reposed in us.