L&T’s Intuitive Engineer

ON A HUMID Ganesh Chaturthi morning, Mumbai hums with excitement as traditional music plays at colourful pandals in every corner. Yet, there’s a distinct calmness in Prabhu Kutir Apartment in the upscale Altamount Road. At 8:30 a.m., S.N. Subrahmanyan (SNS), chairman and CEO of Larsen & Toubro, strides into his 9th-floor office with quiet precision. The office, just below his residence, is a stone’s throw from Antilia, the imposing home of Mukesh Ambani, India’s richest man. Though the 63-year-old, dressed in understated formal attire, has to soon board a flight to Germany, his calm demeanour shows no trace of stress from a packed schedule.

SNS often hears from his sons — one a partner at Bain & Company, the other founder of an EV battery start-up in U.S. — about work-life balance, but he views it differently. “I tell them there’s no such thing as work-life balance. It’s all work-work balance,” he says. His fit frame reflects the discipline of a man who thrives on routine. “If I don’t jog every morning, I feel restless,” he says.

This dedication — both personal and professional — has driven SNS’ career at L&T, which he joined in 1984. While A.M. Naik, his predecessor, built the L&T of today, SNS is building the L&T of tomorrow. Founded in 1938 by Danish engineers Henning Holck-Larsen and Søren Kristian Toubro, L&T is now present in sectors its founders could hardly have imagined. While engineering and construction remain its backbone, SNS is steering the company into future industries, from chip design to hydrogen electrolyser manufacturing.

SNS’ approach is encapsulated by his unabashed admiration for his neighbour. “There is God, and then there is Mukeshbhai,” he says. “How can one person create a refinery business, a gas business, a telecom business, a digital business, and now a green energy business in one generation? It’s magnificent.”

Though impressed by Ambani, his benchmark is global. “Siemens is a great company to emulate,” he says. “It started off as an EPC company, much like us, but transformed into a technology powerhouse. When I met their chairman, I told him, you’re the benchmark for us.” For SNS, Siemens represents the future L&T could grow into — a conglomerate embedded in technological innovation while staying true to its engineering roots. “They’ve placed bold bets on automation, AI, robotics, and capital allocation. Whenever I meet them, I ask, tell me how you do it; I’m ready,” says SNS passionately.

This drive is one reason Fortune India’s jury selected SNS as Best CEO in super large business category. “I feel blessed, though there are far more deserving names,” says SNS, under whose leadership L&T has recorded a sales and profit CAGR of 10.77% and 10%, respectively, since FY18.

Naik focused on matching L&T’s growth to India’s GDP, SNS is now aligning it to the country’s self-reliance efforts, emphasising sustainable, profitable growth. “Growth is a way of life, but profitable growth is a great way of life. Business exists to make a profit. One cannot take that away,” says SNS, who has embraced this philosophy almost intuitively.

Betting It Right

Leading a conglomerate as large as L&T requires balancing intuition with precision. While SNS trusts his gut on big decisions like backing India’s semiconductor design push, he acknowledges the complexities. As a trained engineer, he likens decision-making to solving calculus problems. “Calculus is still something I need to conquer.” For him, solving these problems is as satisfying as scaling Everest, though he admits, “It’s still Everest for me, but I’ll continue to try.”

He’s done well so far.

In recent years, L&T has made strategic exits from businesses that no longer align with its future. “Some businesses lose their edge, maybe due to leadership or outdated technology,” he says. These exits were made not out of failure but from understanding that focus drives results.

He speaks with the wisdom of someone who’s spent a lifetime in risky projects, honing his intuition. “In a business carrying so much risk, you get a sense of what will work. When something feels wrong — a client, a contract — I say no.” This instinct, developed over decades navigating L&T’s global operations, has earned him a reputation for decisiveness. “Nine-point-nine times out of ten, when I’ve said no, I’ve been right,” he says. This decisiveness, paired with betting on leaders rather than just business models, has allowed L&T to pivot when necessary and double down when the time is right.

What makes SNS unique is his ability to view L&T’s future through the lens of an engineer while pushing into new territories. “I’m a civil engineer. I don’t know much about IT, manufacturing, or finance. But I’ve learned that you don’t have to know everything — you just need to ask the right questions,” he says.

SNS doesn’t shy from acknowledging his limitations, yet he’s led L&T into transformative ventures — green hydrogen, data centres, and semiconductor fabrication. The secret? Surrounding himself with experts. “I just need to know when someone is talking sense.”

Bold and Futuristic

L&T’s engineering centre has always echoed with ambition. Massive columns, reactors, heat exchangers, and nuclear shields dominate the space. Rocket casings and satellite parts being crafted are testaments to L&T’s engineering prowess, a field where failure is often the price of innovation. “R&D requires money. Sometimes the balance sheet can bear it, sometimes it can’t. But we’ve succeeded in almost everything we’ve taken on,” says SNS. That ethos of experimentation is woven into L&T’s DNA. For SNS, risk-taking isn’t a strategy — it’s a way of life.

L&T is betting big on semiconductors, a field gaining importance as countries chase technological sovereignty. SNS acknowledges that building a semiconductor fabrication facility requires “deep pockets,” something even L&T’s robust finances can’t fully support. “I’m not convinced we can do it.” Despite this realism, L&T’s IT arm — L&T Technology Services — has carved out a niche in semiconductor design. “I may not fully appreciate semiconductor design, but I have a feel for it,” says SNS. The key is listening to experts and hiring the right talent. “When I meet people in the semiconductor world, I try to understand their approach. And what I’ve learned is, don’t debate it — just get into it.”

L&T’s semiconductor arm acquired Bengaluru-based SiliConch Systems for ₹183 crore, gaining 11 patents. “Within six months, we signed six agreements to design chips for Indian companies,” he says. The key to success, as always, is leadership. “The right leader makes the difference. No matter the venture, success depends on leadership,” he says, pointing to Sandeep Kumar, who relocated to the U.S. to spearhead the semiconductor initiative.

L&T’s first hydrogen electrolyser also came to life thanks to a senior leader. “We told him, ‘Come what may, don’t tell me you cannot make an electrolyser’,” he recalls. L&T is now using robots to manufacture electrolysers in Hazira, planning to commercialise the technology soon. “We will scale it up,” he says, confident that L&T will push boundaries in green energy.

The Way Ahead

Recent years haven’t been without challenges. With SNS at the helm, L&T’s revenues have doubled, but profit margins (PBDIT as % of net revenue) have dropped to their lowest (10.63%) in a decade, a consequence of the pandemic. “EPC business was hit hard,” he says. “We couldn’t get staff to the site. When you can’t work from home, it’s difficult.”

Covid months are etched in his memory. “I still pinch myself and ask Shankar [CFO] how did we declare sales and profit when 70% of the company wasn’t working?” After recovery, geopolitical challenges posed new hurdles. Despite headwinds, optimism remains. “Our order backlog is nearly ₹5 lakh crore,” he says.

Unlike the Tatas, L&T doesn’t have a holding company structure. Employee trust holds the majority of shares, limiting restructuring flexibility. However, listing subsidiaries like LTI, LTTS, and L&T Finance has worked well. “Other verticals are not ready to be listed because unity is strength,” he says, explaining how EPC and manufacturing are intertwined. While EPC dominates the balance sheet, SNS plans to expand IT and technology services, predicting they will make up 20-25% of the company. Manufacturing will remain steady, with no immediate plans for new workshops, though modernising existing ones remains a priority. In an era where conglomerates venture into consumer-facing businesses, he remains focused on core strengths. “We’re a B2B company,” he says.

Judicious capital allocation is key for L&T. The company recently spent ₹10,000 crore on share buyback, the first in its 85-year history. “A buyback gives shareholders a good price and increases the company’s value for those who hold on,” says SNS. But investing in growth remains crucial. “Look at Hyderabad Metro, where we invested ₹20,000 crore, or when we took over Mindtree with ₹9,500 crore. These were substantial investments driven by the organisation’s needs.”

L&T is also making significant investments in infrastructure. The company is building new campuses in Coimbatore, Bangalore, Kolkata, and Baroda to support its IT, technology and engineering divisions. SNS is also determined to grow the order book from ₹4 lakh crore to ₹5 lakh crore, requiring substantial capital for equipment. L&T allocates ₹5,000-6,000 crore annually for these needs.

The goal for the next five years is ambitious — a ₹15 lakh crore market cap for the group, including LTI, LTTS, L&T Finance, and others. “I personally wish L&T has a ₹10 lakh crore standalone m-cap,” he says.

It’s clear what SNS envisions — a future for L&T where cutting-edge tech and time-honoured engineering coalesce seamlessly.