TEAM SAPPHIREPRESENTATION ON

CONSTRUCTION SECTOR OF INDIA

THE TEAM Faculty Mentor: Mrs. Aseema Kulkarni

Student Mentor: Mr. Akshay Ghiya

Team Members

Shweta Choubey Mahendra Chaudhari

Nilanjan Choudhary Kumar Prince

Sahiba Dogra Premankur Raj

Ashutosh Agrahari Ravi Kumar

Anamika Singh Baghel Neha Rajput

Vaibhav Sharma Harshvardhan Kurane

MACRO ANALYSIS

INTRODUCTION: The construction is the second largest economic

activity in country next to agriculture .

Construction is usually done or co-ordinated which is specialized in one type of construction i.e. residential, commercial or developmental.

Indian construction industry has generated employment

for 33mn people in the country.

Cost structure of the construction industry is dominated by raw material cost & sub contracting cost .

SIZE OF THE INDUSTRY

Indian construction industry consists of 200 firms in the corporate sector.

There are about 1,20,000 class A contractors registered with various government construction bodies.

Thousands of small contractors. Total sales of the construction industry

have reached more than 80,000 crores in 2011 from 42,885.38 crores in 2005.

GOVERNMENT INITIATIVES

Progressive reform measures

100% FDI allowed in realty projects through automatic route.

Minimum area that has to be taken up in 10 hectares from 40 hectares.

TOP LEADING COMPANIES

1. LARSEN & TOUBRO

2. JAYPRAKSAH ASSOCIATES

3. LANCO

4. RELIANCE

5. GMMR

6. PUNJLLOYD

7. IVRCL

8. HINDUSTAN CONSTRUCTION COMPANY

CONTRIBUTION TO GROWTH OF ECONOMY

Power

Roads

Railways

Ports

Airports

Urban development

PESTLE ANALYSIS

Political Factors

Building Commencement Certificate

Documentations and permits

As Floor Space Index (FSI)

As Occupation Certificate:

Brihan Mumbai Corporation [BMC]

Developing Plans

CRZ (Coastal Recovery Zone):

As TDR (Transfer of Development Right)

Economic Factors

As Fluctuations in prices of inputs

As Changes in demand

As Future Growth & Resale Value

As Stamp Duty & Registration

Social Factors

Credibility of the company/firm

As Perceived Image of the property developed

As Building Facilities

Technical Factors

Pre-structured Concrete Blocks:

Mixture of Cement and Sand:

Other Equipments: other modern machines that are

used in construction

Legal

Permits required in construction industry.

Building commencement certificates

Occupation certificates

Construction taxes should be paid.

Use of standard inputs

Environmental

Green building , that is plant some trees

in the construction site.

Not to cut the trees for infrastructural

development.

All corporations follow “GO GREEN”

strategy.

MAJOR PLAYERS

o Market Position - 1 Order Book – 1,30,000 crore Market Capital – 95,241 crore Profit (2011-12) – 4,456 crore L&T was a successful bidder for NHAI’s 275

km Amravati to Jalgaon and 209 km Jalgaon to Maharashtra. 4800crore project..

Market Position - 2 Order Book – 55,000 crore Market Capital – 6,840 crore Profit (2011-12) - 210 crore 165kms greater noida – agra 6lane

highway…

Market Position - 3 Order Book – 31,016 crore Market Capital – 3315 crore Profit (2011-12) - 123 crore Thermal, hydal , solar projects…

Market Position - 4 Order Book – 28,000 crore Market Capital – 13,444 crore Profit (2011-12) - 2000 crore Rs 800 crore project entailing four laning

of Gurgaon - Faridabad and two laning of Ballabhgarh - Sohna road.

Market Position – 5 Order Book – 24,000 crore Market Capital – 9,283 crore Profit (2011-12) - 120 crore 555-km Kishangarh-Udaipur-Ahmedabad

highway, from four to six lanes.Worth around Rs 7,200 crore, biggest project awarded by nhai…

MICRO ANALYSIS

Introduction of L&T

Larsen &Toubro is India’s largest technology,

engineering, construction and manufacturing

company reputed for its key growth sectors .

It is the construction arm of Larsen and Toubro

for over six decades and has been building

landmark projects in India and abroad.

VISION

1. Committed to total consumer satisfaction and enhancing shareholder value.

2. Innovative technique.

3. Attaining global benchmarks.

4. Foster a culture of caring.5. Meeting expectations of shareholders,

employees and society.

HISTORY OF L&T

L&T was founded in Mumbai in 1938 by two danish engineers ,Henning Holck-Larsen and SorenKristian Toubro.

Both of them were strongly committed to devoloping India’s engineering capablities to meet the demands of the industry.

Today, the company sets global engineering and benchmarks in terms of scale and complexity.

The journey In 1944, ECC was incorporated. In 1945, represnted british manufactures. In 1946, larsen & Toubro private limited born In 1948, created uninhabitable swamp in powai into a manufaturing land mark. EXPANDING HORIZON IN 1964, WIDENED CAPABILITIES INCLUDED BEST TECHNOLOGIES. IN 1973, ONE OF THE TOP-25 INDIAN COMPANIES.

ORGANISATIONAL STRUCTURE

CHAIRMAN

MANAGING DIRECTOR

SEO VP VP VP

BUILDING INFRASTRUCTURE METALLURGICAL POWER

&FACTORIES MATERIAL HANDLING &TRANS

INDUSTRY ANALYSIS

TOP FIVE COMPETITORS OF THE SECTOR1. Jaypee2. Lanco3. Reliance4. GMMR5. PunjLloyd

CURRENT TRENDS AND TECHNOLOGY

Geo Technical Investigation-Hydraulic rotary & Wireline System-Piezocone penetrometer & Pressuremeter

Deep foundation-Driving Piling Rigs

Design & Engineering-CAD – CAM-Stad pro & E-Tab

Ground Improvement Techniques -prefabricated vertical drain

Advanced Foundation Testing Embedded Retaining Structures

- Diaphragm wall

MARKET STATISTICS

Order book :31 march 2012 Rs 1457230 million against Rs 1309486 million at 31march 2011. 11% growth y-on-y.

Gross revenue for operations At 537378 million against Rs 442961 million 21% growth in PY.

L&T GROUP CONSAOLIDATED TURNOVER

EXCEEDS US$ 12.8 BILLION.

SWOT ANALYSISSTRENGTH

Order book over 100,000 crores .

Diversified business group.Marketing expertise.Leader in city rail.Strong support service.Construction skills trainings.

WEAKESSESRising interest costs.Undifferrentiated products.Low employee satisfaction.Hudge attrition rate.

OPPUTUNITIESHuge investment expected in infrastructure sector.Moving into new markets .Mergers, joint ventures or strategic alliances.Growing in international market.

THREATSIncrease in the cost of inputs. Price wars with competitors.Taxation is introduces on product or services.Entrance of new competitor.

SWOT ANALYSIS

MARKETING STRATEGY

Audacious in vision.

Focus on what know best.

Good governance made the business

sense.

Develop leaders from within.

Pursue quality with zeal.

Innovate to create value for customers.

Give back to society.

GOVERNMENT POLICIES AND REGULATION

1. The Minimum Wages Act,1948.2. The Industrial Disputes Act,1947.3. Other applicable Indian Acts to the

Industry such as:- Governance laws, Economic laws, Contract laws, Labour laws.

Sources Of Funds

Total Share Capital 122.48 121.77

Equity Share Capital 122.48 121.77

Share Application Money 0.00 368.31

Preference Share Capital 0.00 0.00

Reserves 25,079.40 21,334.05

Revaluation Reserves 21.14 22.13

Networth 25,223.02 21,846.26

Secured Loans 1,453.34 1,063.04

Unsecured Loans 8,442.43 6,098.07

Total Debt 9,895.77 7,161.11

Total Liabilities 35,118.79 29,007.37

Mar '12 Mar '11

BALANCE SHEET OF L&T

 Application Of Funds

 

Gross Block 10,618.74 8,897.02 

Less: Accum. Depreciation 2,952.61 2,220.82 

Net Block 7,666.13 6,676.20 

Capital Work in Progress 807.94 785.00 

Investments 15,871.90 14,684.82 

Inventories 1,776.62 1,577.15 

Sundry Debtors 18,729.84 12,427.61 

Cash and Bank Balance 1,020.09 1,518.98 

Total Current Assets 21,526.55 15,523.74 

Loans and Advances 21,445.72 19,499.23 

Fixed Deposits 885.17 211.37 

Total CA, Loans & Advances 43,857.44 35,234.34 

Deffered Credit 0.00 0.00 

Current Liabilities 30,697.53 26,139.56 

Provisions 2,387.09 2,233.43 

Total CL & Provisions 33,084.62 28,372.99 

Net Current Assets 10,772.82 6,861.35 

Miscellaneous Expenses 0.00 0.00 

Total Assets 35,118.79 29,007.37 

Contingent Liabilities2,500.

191,647.66 

Book Value (Rs) 411.53 352.40 

PROFIT & LOSS A/CIncome

Sales Turnover 53,849.48 44,055.55

Excise Duty 583.53 398.84

Net Sales 53,265.95 43,656.71

Other Income 885.32 1,781.28

Stock Adjustments 539.77 559.49

Total Income 54,691.04 45,997.48

Expenditure

Raw Materials 14,456.43 12,372.32

Power & Fuel Cost 638.79 355.45

Employee Cost 3,506.72 2,884.53

Other Manufacturing Expenses

24,286.29 19,886.12

Selling and Admin Expenses 2,439.36 2,103.38

Miscellaneous Expenses 689.10 773.70

Preoperative Exp Capitalised -18.75 -37.87

Total Expenses 45,997.94 38,337.63

Operating Profit 7,807.78 5,878.57

PBDIT 8,693.10 7,659.85

Depreciation 699.46 575.81

Other Written Off 0.00 23.41

Profit Before Tax 6,310.33 5,861.40

Extra-ordinary items -3.89 -49.05

PBT (Post Extra-ord Items) 6,306.44 5,812.35

Tax 1,853.83 1,858.47

Reported Net Profit 4,456.50 3,957.89

Total Value Addition 31,541.51 25,965.31

Preference Dividend 0.00 0.00

Equity Dividend 1,010.46 882.84

Corporate Dividend Tax 101.44 112.82

Per share data (annualised)

Shares in issue (lakhs) 6,123.99 6,088.52

Earning Per Share (Rs) 72.77 65.01

Equity Dividend (%) 825.00 725.00

Book Value (Rs) 411.53 352.40

RATIOS2012 2011

Current ratio 1.20 1.20

Debt equity 0.33 0.33

Inventory 31.82 21.73

Debtors turnover 3.42 3.70

ROI 23.67 22.35

CORPORATE SOCIAL RESPONSIBILITY

A Green Signal for Progress

Construction institute training skills

Health care.

Education

Larsen & Toubro public charitable trust

Water Management

Community Health

Corporate Technical training – support to ITI

Workshops for school students on personality development.

“Mathematics with Smilies” programs to help students befriend a tough friend.

Building water tanks,conducting health and eye camps.

Participating in socially oriented community Events.

CONCLUSION & SUGGESSTION

1. No.1 Construction company in India .

2. Strong construction base throughout India.

3. L&T is very strong in resources and capabilities.

4. Performance of L&T is very encouraging.

5. Introduction of New techniques in construction sector have made substantial growth.

6. Excellent management system.

7. Since last few years , L&T is becoming a lesson for companies in managing explosive growth & developing internal capabilities on continuous basis.

SUGGESTIONS

L&T should more concentrate on the strategies of cost advantage & differential advantages.

Construction industry is booming , so only priority would be to increase quality of construction