"New businesses will take L&T to new heights"
Over his 32 years at L&T, several challenges have been thrown at Palakkad, Kerala-born S.N. Subrahmanyan (fondly called 'Palakkadan Pattar' - a highly intelligent and educated but shrewd Brahmin). His ability to handle those challenges brought him to Naik's attention, who worked closely with him for 10 years before identifying him as his successor. How will Subrahmanyan handle the engineering behemoth? Excerpts from an interview with Nevin John:
What was your first experience of interacting with A. M. Naik?
Around 12 years ago, when I was leading the construction of Bangalore airport, Naik would have heard my name first. He taught me the importance of being rooted to the ground. Naik does networking at the highest scale. He also spends a huge amount of time for HR activities. He is an expert in micro and macro detailing. He is focused on share price and market cap. Being a Gujarati, it is handy for him. But as a South Indian, I will have to take special effort to imbibe that sense.
Naik's biggest contribution for L&T is that he converted the takeover threat into an opportunity. The employees become dollar millionaires and crorepatis after the company issued ESOPs. I learned the art of mentorship from him. He used to mentor about 20-25 executives at a time. I have also started mentoring about 10-12 executives.
How do you see the future of L&T?
Construction will continue to grow in this manner. The company will be an infrastructure player in India, Middle- East, Africa and South-East Asia. It will not look beyond these geographies, I think. The next important businesses will be power and heavy engineering. L&T Infotech and L&T Technical Services - which together have $1.3 billion revenues - will be the future business [drivers] of the group. Infotech will become agile, entering into analytics, Internet of Things, Big Data, automation and robotics. The programmes of L&T Technical Services have an upside potential and they can be patented.
In defence, we are uniquely positioned. Smart world communication is the new business, which has high scope. We are setting up a security solution for Mumbai. Mobile control vans, facial recognition, pattern analysis, behaviour analysis and traffic management analysis are going to be part of it. We are building Jaipur as a smart city -- with solar energy support, cameras, smart kiosks and Wi-Fi. L&T is building security solutions for Hyderabad also. The existing businesses - infrastructure, hydrocarbon, power and heavy engineering - will continue to grow. New businesses like IT, technology services, and digital will propel L&T to new heights.
L&T's investments in shipyard, roads, nuclear and power are not bringing the desired results. How do you plan to turn them around?
Some of these investments are done well ahead of time. The forge shop in Hazira was timed with the execution of the civil nuclear agreement (123 agreement) with the US. But after the Fukushima nuclear disaster, the Parliament passed the liability clause. These things are out of our control. Today, in hindsight, people question the investment? [but] we stick with the decisions and find solutions. Similarly, we are doing case-by-case analysis. We are slowly getting out of assets like roads and ports. With the rise in defence orders, shipyard will be turned around.
