⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
LT - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | LT | Market Cap | 4,95,900 Cr. | Current Price | 3,605 ₹ | High / Low | 4,440 ₹ |
| Stock P/E | 43.8 | Book Value | 494 ₹ | Dividend Yield | 0.94 % | ROCE | 18.5 % |
| ROE | 17.1 % | Face Value | 2.00 ₹ | DMA 50 | 3,963 ₹ | DMA 200 | 3,845 ₹ |
| Chg in FII Hold | 0.58 % | Chg in DII Hold | -0.35 % | PAT Qtr | 3,471 Cr. | PAT Prev Qtr | 1,212 Cr. |
| RSI | 36.1 | MACD | -149 | Volume | 52,87,567 | Avg Vol 1Wk | 72,33,660 |
| Low price | 2,965 ₹ | High price | 4,440 ₹ | PEG Ratio | 2.58 | Debt to equity | 0.27 |
| 52w Index | 43.4 % | Qtr Profit Var | 44.4 % | EPS | 45.3 ₹ | Industry PE | 15.2 |
📊 Core Financials
- Revenue & Profitability: PAT rose strongly (₹1,212 Cr → ₹3,471 Cr), showing robust growth. EPS at ₹45.3 reflects solid earnings capacity.
- Margins: ROCE at 18.5% and ROE at 17.1% highlight healthy efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.27 indicates low leverage and strong balance sheet health.
- Cash Flow: Strong operating performance supports healthy cash generation.
💹 Valuation Indicators
- P/E: 43.8, significantly above industry average (15.2), suggesting premium valuation.
- P/B: 7.29 (₹3,605 / ₹494), reflecting high market expectations.
- PEG Ratio: 2.58, indicating growth is priced at a premium.
- Intrinsic Value: Current price ₹3,605 is above fair value; better entry closer to ₹3,100–3,300.
🏢 Business Model & Competitive Advantage
- Strong presence in engineering, construction, and infrastructure projects.
- Diversified operations across power, IT, and heavy engineering provide resilience.
- Low debt enhances sustainability, though valuation premium reduces attractiveness.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: ₹3,100–3,300 range offers attractive entry.
- Long-Term Holding: Suitable for investors seeking exposure to infrastructure and capital projects, though valuation premium warrants caution.
✅ Positive
- Strong PAT growth (+44.4%).
- ROCE (18.5%) and ROE (17.1%) highlight efficient capital use.
- Debt-to-equity ratio of 0.27 ensures financial stability.
- FII holdings increased by 0.58%, showing foreign investor confidence.
⚠️ Limitation
- High P/E (43.8) compared to industry average (15.2).
- High P/B ratio reflects premium valuation.
- PEG ratio (2.58) suggests growth is expensive.
- Stock trading below DMA 50 (₹3,963) and DMA 200 (₹3,845), showing weak momentum.
📉 Company Negative News
- DII holdings decreased by 0.35%, showing reduced domestic institutional support.
- Technical indicators (RSI 36.1, MACD -149) suggest bearish momentum.
📈 Company Positive News
- Sequential PAT growth from ₹1,212 Cr to ₹3,471 Cr.
- FII holdings increased by 0.58%, reflecting strong foreign investor support.
- Dividend yield of 0.94% supports investor returns.
🏭 Industry
- Industry P/E at 15.2, much lower than company’s P/E, indicating premium valuation.
- Infrastructure and engineering sector remains resilient with strong demand from government and private projects.
🔎 Conclusion
- Larsen & Toubro demonstrates strong fundamentals with efficient capital use and low debt.
- Valuation is premium compared to industry, making entry less attractive at current levels.
- Entry zone between ₹3,100–3,300 is favorable for long-term investors.
- Overall, a fundamentally strong company with growth prospects, though short-term momentum weakness and valuation premium warrant caution.