Larsen & Toubro expects to finalise a successor to group executive chairman AM Naik within 30 months, and also reduce the number of non-core businesses to convert the company into a leaner structure, with more focussed operations.
Speaking at an event to commemorate his 50 years with L&T, Naik, who will retire in September 2017 when he turns 75, said these two steps were his priority. “My plan for the next two-and-a-half years is to build a team and complete the succession planning exercise,” he said at the function attended by former president APJ Abdul Kalam, former and current members of the L&T board, and the entire workforce of the engineering company.
Finding a successor to Naik has been a much-discussed topic at India’s largest infrastructure engineering company, which has weathered takeover attempts by two of the country’s largest business houses — Reliance Industries and the Aditya Birla Group. While Naik has publicly refrained from elaborating on the succession issue, it has been learnt that he is grooming two candidates internally to take up his job.
The Mumbai-based company has also been grappling with issues of running widely-diversified businesses, including heavy civil infrastructure, buildings and factories, transport infrastructure, power transmission and distribution, and water and renewable energy. “L&T has too many businesses and (there is the) need to reduce the complexity by rationalising its portfolio so that it becomes a manageable company with a degree of focus,” said Naik. “If I can finish this, I will be a happy man when I retire from this wonderful company of ours.”
The company has already embarked on a restructuring process that includes grouping all its businesses into 14 broad verticals, each headed by a CEO.