MUMBAI: After hiving off its hydrocarbon division, the engineering major Larsen & Toubro (L&T) today said it is planning to form a new subsidiary `L&T Technology Services'.
"We have a part of engineering services within L&T as a division. We are best-known for our engineering services and setting up a new subsidiary is a step towards this," L&T Group Chairman A M Naik told reporters after its 68th annual general meeting today.
He said the company will also buy over the engineering business which is in L&T Infotech.
"Then we will transfer (the businesses) at the right time between now and April 1, 2014," he said, adding, "so that will become a technology services company."
L&T recently formed L&T Hydrocarbon Engineering Ltd by spinning off the hydrocarbon businesses.
Expressing concerns over the overall slowdown in the economic environment and depreciating rupee, Naik said, "The current economic and political conditions has had an impact on the overall economic growth.
"However, as a company we will strive to maintain our guidance of 20 per cent increase in order inflow and 15 per cent rise in sales for FY14. We will also try our level best to maintain our margins."
He said the company will continue to focus on its overseas business to offset the challenges in India.
"This is a challenging period for the country. We are into the business of capital goods and infrastructure. We will take all possible measures to increase revenue outside India," Naik told shareholders during the AGM.
The company expects to bag nearly Rs 30,000 crore-worth orders from overseas, he said.
"Two years ago, our order intake from the Middle East was Rs 6,000 crore, which rose to Rs 12,000 crore in FY13. For this fiscal, we expect it to touch Rs 30,000 crore," he said.
On the domestic front, the company will be very selective about bidding for contracts, he said.
Chief financial officer R Shankar Raman told reporters that the company has USD 1.5 billion worth foreign loans out of which only 10 per cent or USD 150 million are unhedged.
"We will continue to hedge our assets, but it will happen over a period," he added.
The company has a debt of Rs 60,000 crore on its balance sheet.