L&T looking to sell off Electrical and Electronics business

Engineering giant Larsen & Toubro is looking to sell of its Electrical and Electronics business as part of the ongoing restructuring plans, at least two people familiar with the development said on condition of anonymity.

The board of the company met on Wednesday where the approval for hiving off the vertical was given. The company is in talks with several companies in regards to the sale of the division. Schneider Electric and another US based company are in talks currently with L&T, said one of the sources mentioned above.

The management of L&T declined to comment on the deal of selling off the division.

The Electrical and Electronics division constitutes around 7% to the total revenues of L&T and makes products like switch gears, air circuit breakers, circuit breakers and switch boards. The division had revenues of Rs 2212 cr for the first 9 months of the year and has an EBITDA margin of around 11%. The division has manufacturing facilities in Powai, Ahmednagar, Mysore, Navi Mumbai and several locations abroad.

An analyst who did not want to be identified said “The division would have revenues of around Rs 3000 – 3200 cr for the full year. This division is lagging in business for L&T and the company is now focusing on core businesses. L&T is the leader in switchgears and hence the deal could command a premium”

The stock of L&T was up 3% after the story was broken on ET NOW.