2023 to be a challenging year due to Covid recurrence, says L&T CEO

Soaring price of oil, gas and other commodities, however, a concern, Subrahmanyan says

The world would have to brace for a challenging year in 2023 due to the latest spurt in Covid-19 cases in several countries, warned S N Subrahmanyan, CEO & MD of Larsen & Toubro, in his New Year address to employees on Monday.
 
In a townhall at the Powai headquarters of the engineering major, Subrahmanyan, 62, said the government’s proactive approach towards infrastructure augured well for the nation. The initiative comes despite soaring prices of oil, gas, and other commodities, which are a concern for businesses, as supply chains remain disrupted due to the Russia-Ukraine war, he said.
 

“The government has embarked on a major infrastructure capital spend,” Subrahmanyan said. “Proactive steps, such as introducing PLI schemes and ease of doing business, have created a positive atmosphere for growth,” he said, adding that the company won orders across categories and remained committed to “great execution”.
 

“At L&T, we now have the highest-ever order backlog. We are committed to improving margins in the infrastructure space. And are becoming asset-light,” the CEO said.
 
In December, L&T divested its 51 per cent stake in Infrastructure Development Projects (IDPL) as part of its Lakshya 2026 road map. The plan has identified sub-scale businesses that the company needs to exit as it looks to concentrate on high-tech manufacturing, construction and green energy projects, and increase its share from information technology (IT), digital services, and data centres.

 
Subrahmanyan said the company would focus on green supply chain management, circular economy, and biodiversity conservation. “We cumulatively saved 150 million kilowatts per hour (Kwh) of energy, which is equivalent to powering 70,000 homes in a year and avoided emissions of 47,000 tonnes of carbon dioxide equivalent (tCO2e) in 2022, equivalent to planting 500,000 trees,” he said.
 
Subrahmanyan also said that the company was integrating its environmental, social and governance (ESG) goals with its business targets to become a net zero company, achieve water neutrality by 2035, and carbon neutrality by 2040.
 
He said new opportunities in green energy, data centres, and digital services would stretch the company in the near term. "But they have an immense future and we need to pursue the same with vigour," he said, adding that technology would remain a key differentiator for the company.

 
"So, the more we embrace and adopt tech-driven solutions and processes, the easier it will be to succeed. Digital technology brings in data and enables transparency and objectivity in decision-making," he said.
 
Subrahmanyan also said that talent management shall be key to growth for the company. "Traditionally, the infrastructure and manufacturing space has witnessed lower participation by women. As leaders, we have the responsibility to change that. Today, some of our key projects are by women. We are encouraged to do more on this front," he added.