Mumbai: Engineering major Larsen & Toubro (L&T) on Monday said it is eyeing a revenue of Rs 4,500 crore this fiscal from its electrical and automation division business, which manufactures switchgears, metering systems, petrol dispensing pumps and medical equipment, among others.
“If we add (the turnover of) all our foreign subsidiaries, then by this fiscal-end (FY12), we will touch consolidated revenues of Rs 4,500 crore,” L&T senior vice-president (Electrical and Automation) Sharat C Bhargava told PTI in Mumbai.
The company which clocked a Rs 3,675 crore revenue in FY10 is yet to declare its FY11 result.
The Indian market contributes 70% to the company’s revenue, while the rest comes from overseas, he said.
L&T owns a 30% share in the Indian electrical and automation market. It has manufacturing units in Navi Mumbai, Ahmednagar, Mysore, Powai and Coimbatore.
Its overseas business comprises manufacturing units in China and Dubai as well as a joint venture in Saudi Arabia for manufacture and marketing of switchboards and motor control centres. Besides, L&T has switchgear-making units in Malaysia, Indonesia, China and Australia.
“We expect to grow around 15-20% this fiscal as there is an improvement in the power, agriculture and infrastructure sectors,” Bhargava said.
“The real estate and agriculture sectors are improving, which brings demand for switchgear for homes, circuit-breakers and wiring accessories,” he said, adding the average investment of E&A every year for the next five years is Rs 200 crore.
The company plans to ramp up its existing units at Coimbatore and Ahmednagar to cater to growing demand.
“As of today, none of our capacities are under-utilised and if you look at future demand, naturally we need to plan for more capacities. We will increase the capacity of our Coimbatore and Ahmednagar facilities by end-this fiscal,” Bhargava said.
The company has filed 151 patent applications in FY11 as against 128 in the previous year. It has filed a total of 688 patent applications since 2004.
“Our design and development centre (SDDC) introduced a number of new products and variants of existing ones in control gear, power gear, industrial automation and building automation to meet the needs of discerning customers. The new products accounted for 41% revenue in 2010-11,” he said.
He said the company is under tremendous pressure due to soaring prices of silver and copper.
“Silver prices have almost doubled since September. We are still under pressure due to increasing prices of silver and copper,” he said.
Rising raw material costs, especially silver and copper, had forced the company to up prices of its products by around 4% in January this year. The company requires 1,600 tonnes of copper and 30 tonnes of silver per annum.
The company, however, has no plan to effect a further hike, he said.