Larsen & Toubro is investing ₹5,000 crore over five years to build an electronic products and systems business. This move targets the growing demand for electric vehicle components, robotics, and power electronics, aiming to localize technology currently imported from international players.
Larsen & Toubro (L&T) is expanding its reach into high-tech manufacturing by launching a new business unit dedicated to electronic products and systems. The company plans to spend ₹5,000 crore over the next five years to build manufacturing facilities, research centers, and intellectual property. This move marks a strategic shift for the engineering major as it aims to reduce dependence on its traditional engineering, procurement, and construction (EPC) business and capture a share of the technology-driven industrial market.
Strategic Focus on Electronics and Mobility
The new division will focus on four specific areas: power electronics, strategic electronics, robotics, and mobility. By consolidating four of its existing verticals into this new business, L&T is positioning itself to benefit from the rise in electric vehicle (EV) adoption and increased automation in Indian industries. A key driver for this investment is the desire to build indigenous technology. Currently, the Indian market relies heavily on foreign multinational companies for core automotive electronics, and L&T aims to create homegrown solutions to address this gap.
Infrastructure and Production Targets
To support this growth, L&T is setting up a 40-acre campus in Coimbatore dedicated to manufacturing. This facility will work alongside engineering and research hubs in Bengaluru and Coimbatore. The company has already seen early traction, having secured an order to manufacture 500,000 electric traction motors for a two-wheeler producer. Pilot production is scheduled to begin in August 2026, with full-scale commercial manufacturing expected to follow in September 2026. The company plans to scale these platforms to eventually include passenger and commercial vehicles as well.
Financial and Operational Considerations
For investors, the primary monitorable will be how L&T manages this capital-intensive expansion while maintaining its core business performance. The company’s focus on 98% component localization for its traction motors suggests a long-term plan to control costs and reduce supply chain risks. However, moving into advanced electronics requires consistent investment in R&D and specialized talent, which may impact operating margins in the short term. L&T’s ability to win market share from established global technology providers will also be a key factor in determining the success of this new venture. The company expects its addressable market in this segment to grow from the current $2 billion to over $4.85 billion by 2031, providing a long runway if execution remains on track.