SWOT

Phone 9824537558
Akshat Sharma
Prepared
Larsen &byToubro
Ltd.
Email Akshat_sharma@scmhrd.edu

ANALYSIS

1
SWOT ANALYSIS OVERVIEW
INTERNAL FACTORS
STRENGTHS (+) WEAKNESSES (-)

 Dominance in the market which  

provides an advantage over  High attrition rate in workforce

competitors.
 A well thought out Project pipeline
which ensures revenue growth
 strong base of reliable supplier of
raw material
 Strong distribution network
 Integrating complimentary firms
through mergers & acquisition
 Limited success outside core business
 Less than Industry average of
profitability ratio
 Inclination on domestic projects for
revenue generation
 Increasing debts from FY2016 which
affect the financial flexibility

EXTERNAL FACTORS
OPPORTUNITIES (+) THREATS (-)

 Government plans to boost the sector  

post Covid-Lockdown  Order inflow of raw materials a concern

 Harnessing the online channel for new for Construction firm due to Covid-19
customers  “Zero construction” phase during the
 Strategic joint ventures strengthening lockdown has rendered the industry in
the business financial distress
 Recent issue of Non-convertible  Hold up in the awarding of tenders for
debentures worth 2500 Cr. To raise projects on halt
equity, listed on NSE  The Economic dip in the country where
 African market comparatively strong for there is presumably going to be a
infrastructure projects amidst shortage of labor and suppliers
lockdown

ANALYSIS SUMMARY
 
This SWOT analysis can be used as a strategic planning tool but, the analysis does have its
share of limitations since the sector is really volatile and is susceptible to any major changes
in the near future. The external analysis thus, concludes that in the current Covid scenario,
the threats outweigh the opportunities.
 General Overview of the Company
Larsen & Toubro Limited (L&T) mostly carries out technology, engineering, construction and
manufacturing activities. It offers a broad spectrum of design-to-deliver solutions. Its service
portfolio includes basic and detailed engineering, erection and commissioning, equipment
fabrication and supply, procurement and construction, and project management. The
company offers these services to various sectors, including infrastructure, hydrocarbon,
power, defense, aerospace, construction, shipbuilding, mining and metallurgy. The company
also manufactures and distributes construction and mining equipment, and products for
electricity distribution and control. L&T also provides finance related services such as
corporate finance, equipment finance, infrastructure finance, general insurance and related
advisory services. It has operations in the Middle East and North Africa (MENA), South East
Asia and Europe. L&T is headquartered in Mumbai, India.

SWOT Analysis details

Dominance in the market which provides an advantage over competitors and top projects
L&T has a strong brand name in India in the field of construction and manufacturing which
enhances its trust on its clients. L&T has handled various large-scale projects in India and has
successfully created a trustworthy brand name which is very important especially in the
construction industry. Having built the world's largest coal gasifier made in India and exported
to China, the world's biggest ethylene oxide reactor for a petrochemical complex in the Gulf,
the world's largest Fluid Catalytic Cracker regenerator for a refinery, and the world's longest
limestone conveyor.

A well thought out Project pipeline which ensures revenue growth

 L&T Construction has bagged Eastern Dedicated Freight Corridor contract
L&T’s railway strategic business unit of construction business in consortium with Kyosan
Electric Manufacturing Company of Japan has won a significant order in the form of
three packages from the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL).

 Larsen & Toubro to now manage communication network of armed forces

has been chosen to manage the military’s ultra-modern communications network,
called the Armed Forces Network (AFN), which will enable the Indian Army, Navy and Air
Force’s 414 bases across the country to talk and exchange dates securely.
  Launched a new generation Tech service called “Nxt” for industrial client
will use new technologies, digitization and analytics to commercially provide industrial
solutions by tapping on opportunities as companies move towards a new Industry.
L&T- NXT will focus on the areas of artificial intelligence (AI), internet of things (IoT),
virtual reality, augmented reality, geo‐spatial solutions and cyber security to offer
automation solutions to industrial clients by leveraging its diverse customer base and
domain knowledge expertise.

 L&T Construction Awarded Contracts for its Power Transmission & Distribution
Business
The business has won an order to modernize the power distribution network in a
subdivision of Bengaluru Metropolitan Area Zone. With the scope involving conversion
of high voltage overhead lines into underground cables and creation of additional
feeders for load bifurcation, the project will enhance the reliability of the power system.
Similar distribution network strengthening orders have been received in the northern
and western parts of the subcontinent as well.

Financial Position Analysis [Stable]

 The company’s Short term assets (₹1.66T) exceed its short term liabilities (₹1.41T)

 The Company’s Short term assets (₹1.66T) Exceed its long term liabilities (₹728.86B)
Financial Performance of the company [Stable]

[Additional Note]
 Company Defered salary appraisals over Rs 12,000 cr billing loss since lockdown
L&T managing director and chief executive officer(CEO) pegged the billing loss at Rs
12,000 crore, in a webinar with employees. The company anticipated weakness in
Middle East orders, so it will focus on orders from African markets.