November 22, 2008

L&T in talks to acquire Crompton project business

Larsen & Toubro is learnt to have initiated discussions to acquire the project business of Crompton Greaves. Sources said that L&T has started due diligence on Crompton’s project business, estimated at INR 400 crore.

Officials said that Crompton earns nearly 90% of its revenue from engineering product business, while project business contributes only 10%.

Both the companies, however, denied any such development. In intimation to the Bombay Stock Exchange, Crompton said that as of date, it is not contemplating divestment of its project business.

In 2007-08 fiscal, Crompton has recorded standalone revenues of INR 3,875 crore and consolidated revenues of INR 6,830 crore. On the other hand, L&T posted a 55% YoY increase in net profit for 2007-08 fiscal at INR 2,173 crore. The gross sales stood at INR 25,187 crore up by 41% YoY.