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Larsen & Toubro Limited (L&T) is a key technology, engineering, construction and manufacturing conglomerate, and a major player in Indian private sectors. Having cultivated customer orientation and world-class quality, L&T has gained leadership in key spheres of its turnover during more than seventy years. This company has a worldwide network of several countries, steady growth in foreign revenues and manufacturing centers, offices around the globe.
L & T's broad portfolio extends to power, infrastructure, electrical and electronics, engineering construction, and metallurgical and material handling. The businesses of the company are supported by an extensive marketing and distribution channel that enhance the company’s already strong customer service.
Larsen & Toubro Limited (L&T) has its shares listed with the National Stock Exchange of India under the ticker LT.NS. The stock price is ₹3,628.10, up by 6.45% or ₹219.75. L&T market capitalization stands at ₹5.01 trillion, thereby presenting the huge market position of L&T. The experience has moderate volatility tested by the beta of 0.71, and it has a relatively rich ratio of P/E 37.51 compared to its earnings.
The trailing twelve-month (TTM) earnings per share (EPS) are ₹97.14. L&T next earnings call is due between January 28 and February 1, 2025. The stock provides an opportunity to receive a forward dividend of ₹ 28.00 per share, with a yield of 0.82%; ex-dividend – June 20, 2024. A one-year target estimate is at ₹3,903.82, which should be indicative of good market sentiment on the future performance of the company’s stock.
L & T gained over 6% on October 31,2024 due to a good second quarter of the financial year ending 2025. The company reported consolidated revenues of ₹ 61,555 crore for the quarter – up by 21% YoY – because of the advanced ramp up of the Projects & Manufacturing (P&M) portfolio. Of this, international revenue was 52% at ₹32,057 crore, pointing to a strong global P&M ordering pipeline.
For the first half of FY25, L&T recorded consolidated revenue of ₹116,674 crore, an 18% increase from the previous year, with international revenues comprising half of this figure at ₹58,305 crore. L&T’s consolidated profit after tax (PAT) for Q2 reached ₹3,395 crore, up 5% year-over-year, while half-year PAT grew 8% YoY to ₹6,181 crore.
L&T also secured orders worth ₹80,045 crore in Q2, taking its order book over ₹ 5 trillion. This is down 10% YoY but for the reasons of high base effect , the infrastructure projects division reported a YoY growth of 77% new orders for which stood at ₹49,522 crore. L&T said it had secured new orders of ₹7,759 crore in energy projects; 77% of the company’s current ₹1.2 trillion order book comes from international contracts. Similarly, the Hi-Tech Manufacturing segment achieved respectable 64% YoY growth to win new orders of ₹3,920 crore.
L&T incorporates EPC projects, Hi-tech manufacturing and is a $27 billion multinational corporation providing services in over 50 countries. L&T has been trading above the ₹2,000 level since May 2023 and has been growing steadily by 64%, from ₹2,205 to ₹3,609, and the shares are 447% higher than the March 2020 low of ₹661.
Larsen & Toubro Limited (L&T) demonstrated strong financial performance across key metrics. For the trailing twelve months (TTM), L&T reported a profit margin of 5.57%, supported by a return on assets (ROA) of 4.57% and a return on equity (ROE) of 16.10%. Total revenue for the period reached ₹2.43 trillion, while net income available to common shareholders stood at ₹134.31 billion. The company reported a diluted earnings per share (EPS) of ₹98.16.
On the balance sheet, L&T holds total cash reserves of ₹554.39 billion, positioning it with substantial liquidity. However, the company’s debt-to-equity ratio was 119.06% as of the most recent quarter (MRQ), indicating a leveraged position. Additionally, L&T’s levered free cash flow for the TTM was a healthy ₹175.53 billion, reflecting strong cash generation from operations even after accounting for financial obligations.
1. Year-to-Date (YTD) Return:
LT.NS has a YTD return of 3.90%, underperforming the S&P BSE SENSEX, which stands at 9.97%. This suggests that LT.NS has struggled to keep pace with the broader market in 2024.
2. 1-Year Return:
Over the past year, LT.NS achieved a return of 25.19%, slightly exceeding the benchmark’s 23.91%. This demonstrates a strong recovery after a slow YTD performance.
3. 3-Year Return:
LT.NS has an impressive 3-year return of 113.85%, vastly outperforming the benchmark’s 33.95%. This indicates that LT.NS has delivered significant gains to long-term investors, far outpacing the general market.
4. 5-Year Return:
The 5-year return for LT.NS is 170.22%, compared to the benchmark’s 98.35%. This substantial growth over five years highlights LT.NS as a potentially rewarding investment for those with a long-term outlook.
In summary, while LT.NS has experienced slower growth in the current year, it has shown strong performance over 1, 3, and 5-year periods, consistently outperforming the S&P BSE SENSEX.
This indicates that LT.NS may be an attractive option for long-term investors, especially those seeking exposure to companies with a strong growth trajectory over extended periods. The recent underperformance in 2024 might also present an opportunity for investors to enter at a potentially favorable price.
The data highlights a series of mixed results over the past year, with the company EPS estimates in Q423, beating expectations in Q323 but failing to beat estimates in Q422 and Q123
Q4 2022: LT.NS reported an EPS of -$2.59, missing the forecasted earnings target.
Q1 2023: The earnings per share dropped further to -$8.65, marking a significant miss and potentially signaling deeper operational or financial challenges.
Q3 2023: LT.NS rebounded, reporting an EPS of +$2.46, surpassing the market estimate. This positive outcome suggests a recovery in performance, possibly due to successful project completions, cost reductions or favorable market conditions.
Q4 2023 (Forecast): The upcoming Q4 2023 earnings release is scheduled for January 28. Investors are watching closely to see if LT.NS can maintain its recent momentum and continue to beat earnings expectations.
The fluctuation in LT.NS earnings underscores the cyclical and project-based nature of the business. Understanding these quarterly trends and the factors behind each miss or beat can offer insights into the company's operational efficiency, market adaptability, and future performance.
Larsen & Toubro's stock is currently consolidating within the range of ₹3,830 to ₹3,280. After breaking an ascending trendline on October 3, the price is retesting this level today, suggesting potential further downside.
The ₹3,280 support level is a critical area to watch, as it may provide stabilization before a clearer long-term trend emerges.
Larsen & Toubro continues to demonstrate strong financial growth, reinforced by a substantial order book, strong profitability metrics, and an expanding global footprint. With Q2 FY25 results highlighting significant revenue and PAT growth, L&T has reinforced its position as a leader in EPC projects, manufacturing, and services.
While its stock remains in a consolidation phase, the company’s financial stability and growth trajectory indicate positive long-term prospects. L&T’s commitment to quality and strategic international expansion makes it a resilient player in India's private sector and a strong choice for investors looking at large-cap engineering and infrastructure opportunities.
