The 1400-MW Nabha power
project in Punjab is also put on the block, which could reduce its debt by another Rs 7,500 crore.
“Our consolidated debt looks high due to L&T Finance Holdings where it borrows money to lend further. Hence, L&T Finance's debt should not be considered while looking at L&T’s debt. Our standalone debt after reducing cash is not high for the size of the organisation. We do have high debt at some SPV (special purpose vehicle) level like power and Hyderabad Metro project,
which are on their own steam where debt was taken based on their own cash flow,” said he. Subrahmanyan said for the next financial year, the company did not have any big capital expenditure plan and was conserving cash. "In these times, it’s better to have cash in hand. But at the same time, if there is any good opportunity like Mindtree, we will certainly look at it," said he.
In FY20, the company spent Rs 10,000 crore to acquire Mindtree, which Subrahmanyan said, would help increase its presence in the IT sector. “Ultimately, the plan is to merge Mindtree and L&T Infotech once the new management settles down, but the merger is still one or two years away,” he said.
L&T earns almost 75 per cent of its revenues from the EPC (engineering, procurement and construction) and projects business, followed by 15 per cent from IT and financial services, and the rest from manufacturing. “The defence business is a permanent start-up but it is limited by its size while it’s the services business which will grow faster. These companies
are growing at the rate of 15-16 per cent a year and will continue to grow at the same pace, faster than other businesses,” he said.
Subrahmanyan said FY20 was one of the toughest years in recent times. As the company has several verticals, once one vertical went down, others chipped in. “The hydrocarbon, power transmission, water and power sectors did well.”
The domestic order book did not see any major change, though it received some good orders from West Asia in the hydrocarbon and water segments. The company also received some good orders from Africa in power transmission and water which compensated for slow orders in India. In the power sector, the company received an order to set up a power project in Buxar worth Rs 7,000 crore.