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INVESTMENT INSIGHTS

Check Before You Invest : Larsen & Toubro Ltd

BSE: 500510 NSE: LT ISIN: INE018A01030
  |   Sector:  Construction & Infrastructure   |   Industry:  Engineering - Construction

Snapshot

Q.1 Which industry/sub-sector does Larsen & Toubro Ltd belong to?
Larsen & Toubro Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Engineering - Construction segment.
Q.2 Is Larsen & Toubro Ltd a good quality company?
Larsen & Toubro Ltd is a good quality company, based on a consistently good 10 year financial track record.
Q.3 Is Larsen & Toubro Ltd undervalued or overvalued?
Larsen & Toubro Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Larsen & Toubro Ltd a good buy now?
Larsen & Toubro Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Larsen & Toubro Ltd?
Larsen & Toubro Ltd revenue growth is 15.7% for FY-2025 , which is above its 5 year CAGR of 12% , indicating faster growth.
Q.2 Gross Profit margin of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.7% for FY-2025 , which is below its 5 year median of 11.1% , indicating decreasing margins.
Q.3 Operating Profit Margin of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.83% for FY-2025 , which is below its 5 year median of 13.13% indicating decreasing margins.
Q.4 Net Profit Margin of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Net Profit Margin is 6.92% for FY-2025 , is above with its 5 year median of 6.89%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 10.7 11.1
Operating Profit Margin 11.83 13.13
Net Profit Margin 6.92 6.89
Q.5 Return on Asset of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Return on Asset is 4.97%, which is above its 5 year historical median of 3.92%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Return on equity is 19.33% for FY-2025 , which is above its historical median of 14.78%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Return on capital employed is 15.84% for FY-2025 , which is above its estimated weighted average cost of capital(WACC) 11.25%, indicating value creation.
Q.8 Cash conversion cycle of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Cash conversion cycle is -11 days, above its historical median of -26 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.72 0.57
ROE 19.33 14.78
ROCE 15.84 12.98
Cash Conversion Cycle -11 days -26 days
Q.9 Debt to Equity ratio of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Debt-to-Equity ratio is 1.33 , which is in line with the industry average of 1.33 , indicating similar to debt levels in the industry.
Q.10 Debt to cash flow from operations of Larsen & Toubro Ltd?
Larsen & Toubro Ltd Debt to cash flow from operations is 14.14 , which is at a unhealthy level, indicating the business is not able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Larsen & Toubro Ltd?
Promoters hold 0.00% of the Larsen & Toubro Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Larsen & Toubro Ltd vs industry peers?
Larsen & Toubro Ltd revenue CAGR is 11.95% , compared to the industry median CAGR of 11.95% , indicating stable growth and maintaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 2,55,734.5 1,83,340.7
Gross Profit 27,363.5 20,534.2
Operating Profit 28,473 23,894
Net Profit 17,687 12,625
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.72 0.57
ROE 19.33 14.78
ROCE 15.84 12.98
Cash Conversion Cycle (days) -11.05 -26

Valuation & price assessment

Q.1 Stock return of Larsen & Toubro Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 17.5% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 17.5% 24.8% 22.2% 27.6%
Q.3 Valuation ratios of Larsen & Toubro Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 34.49 16.35 27.03
Price to Book 5.33 2.05 1.70
Price to Sales 2.02 1.00 1.45
EV to EBITDA 16.44 10.33 11.36

Check more companies

1. Larsen & Toubro
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3. DLF
4. Ambuja Cement
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