EXECUTIVE SUMMARY
The sector chosen by my group is Construction sector and the company chosen is Lanco Infratech. This report covers my role in advising the Board of Directors of Lanco Infratech their future strategic decision and suggesting them strategies in promoting their organization’s theme- “Developing Strategy for Business Responsibility and Sustainability”. Lanco Infratech Limited is a 25-year old Indian group, with its business in the domains of Infrastructure, Engineering, Procurement and Construction (EPC), Power, Solar and Natural Resources.
This document contains detailed information about the key areas of research and sources which had to be undertaken as a contribution to the presentation, the key sources of research, references …show more content…
Firstly, I did a research on the current situation of the company, its internal environment and external environment by going through the company’s official website, the problems that the company is facing currently, and came up with a strategy which got consent from the entire group.
The internal problems that Lanco is facing are:-
• Vicious debt cycle- Stock prices have fallen approximately 60% in less than 6 months, resulting in a huge fall in market capitalization. For the FY 2014, the Return on Equity (ROE) was 0%, the operating profit had reduced, the interest payments had increased a lot and debt to equity ratio had increased to 25.18, all pointing towards too much debt in the capital structure of Lanco Infratech.
• Low capacity utilization – There has been an under utilization of the equipments of the company because of various stalled projects and government interventions.
• Huge Negative Working Capital- This was due to increasing loans and non-revenue generating current assets, leading to Lanco Infratech suffering from liquidity …show more content…
Some of them are as follows:-
PEOPLE- Skill Development in Construction Industry- Vocational training for sustainable development given to the employees at Lanco Infratech will help by resulting in a reduction of wastage of resources and improve efficiency. It will also help them to learn and develop more environment friendly ways of construction.
OPERATIONS- Mergers and Acquisitions- If Lanco Infratech merges or gets acquired by another company, there are 2 options:
• It can merge with a bigger company in the Construction Industry, i.e. a company doing well in terms of debt and profits. Eg- DLF, Larsen and Toubro, etc.
• It can get into a merger with a raw material supplier. But, the supplier should be in a financially stable position. Eg- Get into a merger with Ambuja
The sector chosen by my group is Construction sector and the company chosen is Lanco Infratech. This report covers my role in advising the Board of Directors of Lanco Infratech their future strategic decision and suggesting them strategies in promoting their organization’s theme- “Developing Strategy for Business Responsibility and Sustainability”. Lanco Infratech Limited is a 25-year old Indian group, with its business in the domains of Infrastructure, Engineering, Procurement and Construction (EPC), Power, Solar and Natural Resources.
This document contains detailed information about the key areas of research and sources which had to be undertaken as a contribution to the presentation, the key sources of research, references …show more content…
Firstly, I did a research on the current situation of the company, its internal environment and external environment by going through the company’s official website, the problems that the company is facing currently, and came up with a strategy which got consent from the entire group.
The internal problems that Lanco is facing are:-
• Vicious debt cycle- Stock prices have fallen approximately 60% in less than 6 months, resulting in a huge fall in market capitalization. For the FY 2014, the Return on Equity (ROE) was 0%, the operating profit had reduced, the interest payments had increased a lot and debt to equity ratio had increased to 25.18, all pointing towards too much debt in the capital structure of Lanco Infratech.
• Low capacity utilization – There has been an under utilization of the equipments of the company because of various stalled projects and government interventions.
• Huge Negative Working Capital- This was due to increasing loans and non-revenue generating current assets, leading to Lanco Infratech suffering from liquidity …show more content…
Some of them are as follows:-
PEOPLE- Skill Development in Construction Industry- Vocational training for sustainable development given to the employees at Lanco Infratech will help by resulting in a reduction of wastage of resources and improve efficiency. It will also help them to learn and develop more environment friendly ways of construction.
OPERATIONS- Mergers and Acquisitions- If Lanco Infratech merges or gets acquired by another company, there are 2 options:
• It can merge with a bigger company in the Construction Industry, i.e. a company doing well in terms of debt and profits. Eg- DLF, Larsen and Toubro, etc.
• It can get into a merger with a raw material supplier. But, the supplier should be in a financially stable position. Eg- Get into a merger with Ambuja