IPO-bound L&T Tech sees 15% revenue rise this yr;eyes buyouts

Mumbai, Sep 6 (PTI) L&T Group chairman AM Naik todaysaid the company’s IPO-bound engineering services arm istargeting a 15-percentage points increase in revenue to USD525 million in the current financial year, and USD 1 billionover the next three years through inorganic growth. "We were at USD 460 million last year and will grow toUSD 525 million this year," Naik, who is also thenon-executive chairman of the IPO-bound L&T TechnologyServices, said during a roadshow here. He said the company wants to double revenue to USD 1billion over the next three-four years, and will be looking atacquisitions with revenue of USD 150-200 million to achievethe number. Senior company officials said the acquisition will beto gain control over new technologies rather than focused onlyon expanding revenue. The company’s revenue have grown at acompounded rate of 23 per cent per year over the past threeyears, they added. Its pre-tax profit margin moved up to 17 per cent lastyear, largely on the back of the utilisation ratio moving upto 76 per cent from 71.4 per cent in the year-ago period. Theattrition was at 13 per cent. L&T Technology Services’ senior officials said a bulk60 per cent of the revenue comes from North America, followedby 20 per cent from Europe (Germany, plus the Nordic region),and added the impact of Brexit will be limited on it asBritain contributed only 2 per cent of revenue last year. The company today said it will be hitting the marketwith the IPO next Monday and raise up to Rs 890 crore at theupper end of the price-band set between Rs 850 and Rs 860. Parent L&T’s will be diluting 10.2 per cent stakethrough the issue and will have to get its stake down furtherto 75 per cent in three years. The company is offering 10.4 million shares of Rs 2face value as part of the initial public offer. This is the second market debut from the engineeringgiant L&T in as many months and retiring chairman Naik saidthere is no new listing on the anvil from the group. In a tepid debut, L&T Infotech listed 6 per cent belowthe listing price of Rs 710 last month and closed up 1 percent today at Rs 652.10 on the BSE against a Sensex rally ofover 1.6 per cent. PTI AA BEN NSKRDS