Larsen & Toubro is set to consolidate its integrated engineering services (IES) business into one separate entity, a top company official said.

“We are slowly taking out our engineering related offerings from L&T Infotech and creating this unit since we felt that the focus on IES was getting diluted. Like L&T Infotech, this unit will be a 100-per cent owned by L&T,” Dr Keshab Panda, the newly appointed Chief Executive for IES, told Business Line.

He came on board L&T in September after a long stint with the then Satyam Computer Services where he was Head of Europe operations since 2004.

In line with the IES-focused strategy, L&T has hired management consulting firm Booz & Company. “Booz & Co will help the IES unit with services such as portfolio analysis, GAAP analysis, go-to-market strategy, etc. We will have greater clarity on our future business plans in a month or so,” Dr Panda said.

The company is in the process of working on the name of the new entity which will kick off with 140 customers and revenues of $125 million.

“My target going forward is to grow the business by 50 per cent every year through a mix of organic and inorganic growth,” he added.

The downside is that not all the 140 customers could be retained going forward. “A customer who is not going to scale up is not worth carrying,” Dr Panda said.

According to the L&T Infotech Web site, its IES practice consists of EmSyS-an embedded software and hardware service provider and L&T e-engineering, which provides engineering services involving electronic product design, development & testing.

E-engineering has been in existence for the last 10 years as part of L&T’s engineering and construction projects business.

Source: http://www.thehindubusinessline.com/2009/11/18/stories/2009111851200400.htm