LT - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.3

Here’s a comprehensive analysis of Larsen & Toubro Ltd (LT)

📊 Core Financials

Profitability: ROE of 16.6% and ROCE of 14.5% indicate solid capital efficiency for a diversified conglomerate.

Quarterly PAT: Declined from ₹5,173 Cr to ₹3,617 Cr — likely due to seasonality or project timing. Still, YoY profit growth is up 29.8%, which is impressive.

Debt Profile: Debt-to-equity ratio of 1.36 — moderate leverage, manageable given LT’s scale and infra-heavy operations.

Cash Flow: Not explicitly stated, but consistent earnings and dividend payout suggest healthy operating cash flows.

💰 Valuation Metrics

Metric Value Interpretation

P/E Ratio 30.9 Above industry average (23.8) — priced for quality

P/B Ratio ~4.92 High — reflects strong market confidence

PEG Ratio 1.35 Fairly valued — growth aligns with price

EPS ₹115 Strong earnings base

🧠 Business Model & Competitive Edge

Diversified Segments: Infrastructure, Hydrocarbon, Power, Defence, IT, Financial Services — reduces cyclicality risk.

Execution Strength: Strong order book and execution capabilities — recent Q1 results beat estimates

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Global Reach: Expanding international footprint, especially in hydrocarbon and defence.

Synergies: Benefits from group companies like LTIMindtree and L&T Finance — integrated ecosystem.

📈 Technical & Sentiment Indicators

RSI (45.8): Neutral to slightly bearish — consolidation phase.

MACD (-37.0): Negative — weak momentum.

DMA Levels: Trading near 200-DMA — key support zone.

🏁 Entry Zone & Long-Term View

Entry Zone: ₹3,450–₹3,500 — near 200-DMA and technical support.

Holding Guidance: Strong long-term candidate due to diversified business model, robust execution, and consistent profitability. Accumulate on dips and hold for multi-year compounding.

Brokerages like CLSA, Jefferies, and Morgan Stanley have recently raised their target prices to ₹4,100–₹4,230, citing strong order inflows and execution

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Want to explore its segment-wise revenue or compare it with other infra giants like Adani or NTPC?

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