Indian conglomerate behind the ‘Architectural Marvel’ Ram Temple in Ayodhya, Pinaka Artillery, LCA Tejas, BrahMos, etc, recently announced that it secured billion-dollar defense contracts for the fiscal year ending March 31, 2024.
L&T Secured Massive Defense Contracts From Govt
Indian conglomerate behind the ‘Architectural Marvel’ Ram Temple in Ayodhya, Pinaka Artillery, LCA Tejas, BrahMos, etc, recently announced that it secured billion-dollar defense contracts for the fiscal year ending March 31, 2024. The Ram Mandir (Temple of Lord Rama) in Ayodhya stands tall as a symbol of meticulous craftsmanship, spanning a vast 70-acre complex. Designed and constructed by L&T, this three- storeyed temple showcases unparalleled engineering, utilizing innovative techniques to ensure longevity without relying on traditional metals like iron or steel.
Beyond Ayodhya, L&T’s portfolio boasts other architectural marvels, such as the Sardar Patel statue in Gujarat, Atal Setu in Mumbai, and India’s inaugural coastal road featuring an underground tunnel in Mumbai. This private sector player’s prominence extends in the Indian defense contracts as well, encompassing upgraded fighter jet engines, supersonic cruise missiles, close-in weapon systems, high-power radars, and ship-borne Brahmos systems.
Hi-Tech Manufacturing Segment
The company recently renamed its Defence Engineering business as L&T Precision Engineering & Systems, effective April 01, 2024. This and the Company’s Heavy Engineering business constitute the Hi-Tech Manufacturing segment. On May 9, 2024, the company disclosed its FY 23-24 financial results. While specific figures for the Defense Engineering division (L&T Precision Engineering & Systems) were not disclosed, the company did provide insights into the Hi-Tech Manufacturing Segment’s performance.
The company reported robust performance in the Hi-Tech Manufacturing Segment, with an order book totaling ₹31,975 crores with export orders comprising 8% as of March 31, 2024. Customer revenues surged by an impressive 25% year-on-year, reaching ₹8,196 crore as per L&T’s financial report.
L&T’s Significant Contracts
During the fiscal year 2023-24, Larsen & Toubro (L&T) undertook several notable contracts with the Ministry of Defence. This included fulfilling an order for the Pinaka Artillery Launch system, developed by L&T as part of the Pinaka development program by the DRDO. In March 2024, L&T secured a major contract with the Indian defense ministry for the acquisition of Brahmos missiles to fulfill the combat and training needs of the Indian Navy, valued at $2.4B (₹19,518 crores)
Simultaneously, L&T inked another deal with the Indian Air Force (IAF) for the provision of High Power Radars totaling $0.7B (₹5,700.13 crores). Moreover, the company finalized an agreement for supplying domestically developed Close-In Weapon Systems to the Air Force, valued at $0.9B (₹7,668.82 crores) Additionally, the MoD finalized a contract with L&T to procure three cadetships totaling $0.3B (₹3,100 crores). Cadetships are sophisticated vessels equipped with a variety of systems, as well as amenities such as classrooms and accommodations.
Before these agreements, in February 2023, the Defence Ministry had signed a contract worth $0.3BB (₹2,585 crores) with L&T to manufacture 41 indigenous modular bridges for the Indian Army’s Corps of Engineers.
L&T’s Diverse Defense Portfolio
Since the mid-80s, L&T has been a proactive participant in the Defence sector, establishing its presence well before private industry participation became widespread. Participating actively in collaborative efforts with DRDO and contributing significantly to naval indigenization initiatives, L&T Defense has developed a diverse portfolio spanning products, systems, platforms, and solutions in three key segments: Land, Naval, and Aerospace.
When discussing L&T’s defense segment today, it’s important to note that, while it may be considered a small business within the vast scale of the L&T group, approx $2.8B (₹2.21 lakh crores) revenue company, a 3- 5% share still represents a significant defense business volume.
