L&T takes a leaf out of Tata playbook, explores electronics manufacturing entry: Report

Larsen & Toubro (L&T) is exploring an entry into electronics manufacturing services (EMS) and has held preliminary talks with the Tamil Nadu government for about 200 acres of land near Chennai, the Economic Times reported on Wednesday, citing people familiar with the matter.

The $30 billion engineering conglomerate plans to expand into end-to-end manufacturing, taking cues from Tata Electronics’ contract manufacturing model for Apple, according to the report.

It remains unclear whether L&T plans to follow a similar path or pursue a different strategy, ET said.

Given its experience in defence, aerospace and strategic electronics, L&T is likely to focus on components for these sectors, the report added, citing one of the sources.

An executive told ET that these were “initial plans” that could evolve further, while another person said semiconductor manufacturing was “not on the cards” during the discussions.

The company’s semiconductor arm, which has partnered with a Foxconn entity, is part of L&T’s broader ambitions in electronics, the report said.

L&T may avoid consumer electronics and instead target industrial EMS such as Internet-of-Things (IoT) modules for automotive and energy sectors, where its existing engineering and enterprise connections could provide an advantage.

In August, L&T chairman S.N. Subrahmanyan told ET that the company’s two-year-old chip design business employs about 400 engineers, mostly in Bengaluru, with others in Austin, Munich and Tokyo. The division focuses on analogue chip design and aims to commercialise in-house designs, he said at the time.

On Tuesday, L&T said its heavy engineering vertical has bagged multiple projects worth ₹1,000-2,500 crore in both domestic and international markets.

On the international front, the vertical has secured an order from the US to manufacture vessels for a Natural Gas Liquids (NGL) fractionator project and the cartridge for a blue ammonia project in Louisiana.

It has also secured orders for ammonia and urea processing equipment for two fertiliser plants in Mexico, the company said in a filing to BSE.

The company has also won an order for a refinery and integrated petrochemical complex in Saudi Arabia.

It has also secured orders for the supply of critical equipment to both international and domestic nuclear projects.