L&T bets on five boards to keep growth humming
Larsen & Toubro Ltd, India’s largest infrastructure company, has introduced a new organizational structure tasked with sustaining annual growth of 12-15% as the engineering giant’s revenue approaches ₹3 trillion, according to Anil Parab, whole-time director and senior executive vice-president (manufacturing).
The company has set up five divisional boards—infrastructure, energy (hydrocarbon), utilities and metals, renewables, and hi-tech manufacturing—to oversee its business divisions and provide strategic guidance. Each board has six to seven members and operates horizontally across verticals.
The boards will be responsible for making strategic decisions, keeping the organization future-ready, deploying artificial intelligence, and improving productivity, Parab told Mint.
While these boards will act in a strategic, cross-functional capacity, L&T's federal business model will continue, with each business division responsible for its own profit and loss statement. The role of the boards will be to provide strategic guidance and succession planning, while the business divisions will focus on execution. The boards will be evaluated based on the growth of the underlying businesses.
“In an era of rising economic nationalism and global uncertainty, sustained profitable growth demands razor-sharp strategic thinking,” said Parab, who heads the hi-tech manufacturing board.
Growth plan
The system was implemented to ensure the company maintained its growth momentum despite its large size. L&T recorded ₹2.86 trillion in revenue in fiscal year 2026 (FY26), having grown at a compound annual growth rate of 16% over a five-year period.
The company has set a target to expand its topline by 12-15% annually over the next five-year period. At this rate, the company would need upwards of ₹34,000 crore in fresh business in FY27 itself.
The new structure was implemented at the beginning of this fiscal year under its five-year business plan, called Lakshya 31, which will run from April 2026 to March 2031. While most details of Lakshya 31 are publicly known, the setting up of these divisional boards was previously unreported.
“The merit of a divisional board lies not in the creation of another tier of oversight, but in its capacity to forge a more effective continuum between strategy and execution,” said Monish Chatrath, the managing partner at MGC Global Risk Advisory LLP, a risk advisory services firm.
By separating strategic decisions from execution, such a structure enables organizational leadership to concentrate on the larger imperatives of growth, capital allocation and long-term value creation, while empowering individual businesses with the autonomy to respond to their respective market dynamics, he said.
Such a structure can bring sectoral expertise to the fore, sharpen managerial accountability and ensure that strategic deliberations are informed by a more granular understanding of business opportunities and risks.
“However, the efficacy of such an arrangement hinges on the rigour of its design. Clearly delineated mandates, unambiguous decision rights, calibrated delegation of authority and seamless information flows between divisional and group leadership are indispensable,” he said.
Shares of L&T Ltd have shed nearly 12% this year amid an emerging-market sell-off and the war in West Asia, a key business hub for the company. The scrip closed at ₹3654.10 on BSE on Monday, giving the company a market capitalization of just over ₹5 trillion, making it the ninth most valuable company in India.