MUMBAI: Larsen & Toubro chairman Anil Manibhai Naik, 75, on Tuesday received a standing ovation as he addressed shareholders of the engineering giant for the last time in an executive capacity.
Mr. Naik becomes a non-executive chairman from October 1.
AMN, as he is popularly called, outlined L&T’s plans to harness opportunities in the infrastructure, nuclear, smart cities, transport and defence space while addressing the 72th AGM of the company.
Mr. Naik has selected S.N. Subrahmanyan as his successor to lead the company as its MD and CEO.
“I have always believed that succession planning is vital for an organisation’s sustainability. In 2014, I had indicated that Mr. S.N. Subrahmanyan would be my likely successor. A board decision to this effect was publicly announced in April this year, and accordingly on July 1, 2017, he was elevated to CEO & Managing Director in a transparent, well-calibrated demonstration of leadership transition — one of the smoothest in the industry,” said Mr. Naik.
When asked about the leadership crisis at Infosys, Mr. Naik told The Hindu , “I have no comments to make as it’s there internal manner. Everybody has there own style. See how I handed over the company to him (S.N. Subrahmanyan). Planned 12 years before [the handover], announced three years before, notified six months before — smoothest transaction in the industry.”
During AMN’s tenure as chairman from 1999 and 2017, L&T revenues grew from ₹5,000 crore to nearly ₹1,20,000 crore on a like-to-like basis. Achieved entirely through organic growth, it has few parallels in corporate India. In the same period, L&T’s market cap climbed from around ₹2,000 crore to around ₹1,60,000 crore at a CAGR of nearly 28%.
Last year, L&T performed well despite macro-economic headwinds, with profits growing by 43% to reach ₹6,041 crore.
Without naming Reliance Industries, Mr. Naik said, “The unique professional character of the company was threatened, as it faced the imminent prospect of being taken over by a business house. It took astute leadership to turn the conflict into a win-win solution.”
L&T now gets 30% of its revenue from overseas, as it is building metro infrastructure in Doha, Riyadh and Mauritius.
Most shareholders praised Mr. Naik for his leadership, except one employee-shareholder, who has filed a case against the company.
Mr. Naik will receive ₹32.21 crore as leave encashment, according to the company’s 72nd annual report. This forms 85% of his total retirement benefit, which stands at ₹38.04 crore. In 2016-17, his total remuneration stood at ₹78.91 crore, which included ₹3.36 crore as salary, ₹19.27 crore as perquisites and ₹18.24 crore as commission.
L&T shares on BSE closed down marginally at ₹1,119 in a flat Mumbai market on Tuesday.
