Analysts%20Meet%20-May%202001

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Analysts Meet -May 2001
WELCOME
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Difficult Business Environment

• Slowing Economy
• High fiscal deficits limited government
  spending
• Investment Scenario not encouraging
• Fewer opportunities
• Slower pace of investments in Power and
  infrastructure sectors
• Many core sector industries still afflicted by
  excess capacity
• Poor growth in capital goods and manufacturing
  sectors
• Many states affected by drought and sparse rains

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Highlights of FY 2001
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Good performance in a challenging environment

• Order Booking increases by 24
• Order backlog higher by 38
• Sales increase at 5 subdued due to low opening
  order backlog
• Exports grow two-fold to Rs. 7.24 billion
• Export of critical equipment Rs. 0.92 billion
• Project Exports Rs. 3.7 billion
• Cement/Clinker exports Rs. 2.09 billion
• Substantial improvement in Q4 performance
• Cement division returns good performance on the
  back of improved prices and operating
  efficiencies
• EC jobs cross threshold completion levels

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Engineering Construction
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Major Orders Booked -Domestic
Rs.Millions
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Major Orders Booked -Domestic
Rs.Millions
8
Major Orders Booked -Overseas
Rs.Millions
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EC - Financial Performance FY 2001
Rs. Billions
FY 2001
FY 2000
Change
Order Booking
72.01
53.83
34
Sales
45.92
43.53
5
Order Backlog
96.82
70.29
38
PBDIT/Sales
11.7
13.1
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Cement
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Industry review

• 2 negative growth in consumption
• Low infrastructural / development expenditure
• Severe drought conditions in certain states
• Gujarat earthquake
• Prices remained depressed till Nov00
• Improvement in prices since Dec00

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Divisional Performance - FY2001

• Volume growth of 8
• Margins improved due to price improvement in the
  last 4 months and cost reduction measures during
  the year
• Margins could have been better but for increase
  in
• Power Fuel cost
• Limestone royalty
• Freight cost
• Continued efforts on operating efficiencies
• Arakkonam Grinding Unit commissioned in Dec00
• Grinding unit at Durgapur under construction,
  expected to be commissioned by Dec01

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Improving Power consumption
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CementFinancial Performance FY 2001
FY2001
FY2000
Change
Sales - Mio. Tons
Domestic
8.95
9.02
(0.8)
Exports
2.36
1.49
58.4
Total
11.31
10.51
7.6
Sales - Rs. Billions.
21.94
19.35
13.4
Net Realisation - Rs/Ton
1251
1110
12.7
PBDIT/Sales
17.1
12.5
PBDIT/Sales(incl.Fis.benefits)
19.0
15.9
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NCCLFinancial Performance FY 2001
Rs. Billions
FY2001
FY2000
Change
Q4 2001
Q4 2000
Sales - Mio. Tons
1.26
1.11
14
0.34
0.33
Sales - Rs. Billions.
2.45
2.18
12
0.77
0.64
PBDIT
0.08
0.06
33
0.09
0.01
PBDIT/Sales
3.1
2.9
11.0
1.4
PAT
-0.21
-0.23
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Other Segments
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EBG Financial Performance FY 2001
(Rs. Billions)
FY2001
FY2000
Change
Sales
7.01
6.29
11
PBDIT/Sales
17.8
21.1
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Diversified Businesses Financial Performance FY
2001
(Rs. Billions)
FY 2001
FY 2000
Change
Sales
3.39
5.07
(49.6)
PBDIT/Sales
5.3
12.7

• Drop in Sales due to closure of Glass unit till
  July 2000, transfer of valves business to EC and
  transfer of Pithampur unit to JV with Case
• Drop in margin due to closure of Glass unit -
  impact Rs. 9 crores

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LT Infotech
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LTITL back on growth trajectory

• Year of consolidation and growth
• Management team strengthened by drawing talents
  from LT
• CMM SEI Level 4 obtained
• 60 new customers added
• Several new alliances established with technology
  providers
• Focus on domain offering
• Telecom, financial services, power and related
  utilities, health care, manufacturing

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LTITL
Rs. Billions
FY 2001
FY2000
Change
Revenue
2.51
1.67
50
PBT
0.42
0.16
163
PAT
0.36
0.15
140
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Summary Results FY 2001
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New Orders Booked
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Gross Revenues
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Order Backlog
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Segmentwise Revenue
FY 2001
FY 2000
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Performance Indicators FY 2001
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Balance Sheet
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Prospects FY 2002
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EC Order Prospects
Rs.Million
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EC Order Prospects contd..
Rs.Million
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Outlook for Fiscal 2002 - EC

• Environment continues to be tough with limited
  opportunities
• Current Order Backlog in excess of Rs. 95 bn
• Good order booking prospects in power,
  infrastructure and refinery segments
• Timing uncertain

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Outlook for Fiscal 2002 - Cement

• Volume growth of 8 expected.
• Key demand drivers being
• Reconstruction work in Gujarat
• Major concretising projects to be undertaken by
  NHAI
• Further fiscal benefits extended to the housing
  sector
• Demand may get a further boost with
• Good monsoon
• Improved spending on infrastructure
• Price stability to continue in the medium term

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HR Thrust
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HR Challenges

• Challenge of attracting talent
• Attrition among the professionals, specially
  engineers
• Need to nurture and retain talent/special skills
• Need to identify and develop future Leaders
• Improve productivity

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Multi-pronged strategy to Attract Retain Talent
MLP
Career Avenues Movement to LTITL
Compensation Increases for young talent
Exceptional Professionals
Very Good Performers Hot Skilled Employees
Competence Building
Assessment Centres
37
MTS MLP
Management Leaders (Nurturing talent from within
LT)
Management Trainees (Taking talent from outside
nurturing within LT)
250 MLs
40 MTs
MANAGEMENT LEADERSHIP PROGRAMME (MLP)
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Efforts Towards Globalisation
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Globalisation Strategy

• PreQualification
• Quality Accreditation
• Country / Region Focus
• Exploit JV relationships

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Prequalification

• HED prequalified with
• Refineries and oil gas companies in Middle
  East, Far East, South Africa, Venezuala, Brazil
  and USA
• International EPC contractors Bechtel, Fluor
  Daniel, Chiyoda
• EC prequalified with Petronas, Mobil, Amoco
• Construction group is well recognised in Middle
  East

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Quality Accreditation

• Quality certification obtained for export to
  China, UK and Europe
• Cement is manufactured to satisfy British and
  European standards
• ECCs international operations are ISO 9001
  certified
• Trained manpower conversant with quality
  standards of Australia, UK, Denmark, Germany and
  Canada
• LTITL operations are SEI CMM Level 4 certified

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Regional Focus

• Middle East
• South East Asia covering ASEAN and SAARC countries

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Cement Restructuring Update
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Cement Restructuring -Current Status

• Due diligence by potential candidates completed
• JV Agreements and other documents are under
  discussion with potential candidates
• Binding bids to be received after finalising the
  documents

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Thank You