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Last Updated on: 21 December, 2024
Author: Getaka|Social: Getaka Financial Technology X (Earlier Twitter) Profile Getaka Financial Technology LinkedIn Logo

Larsen & Toubro Ltd: Fundamental Analysis, Share Price Insights & Intrinsic Value (2024)

Share Price and Basic Stock Data

Last Updated: December 21, 2024, 2:16 am

Market Cap 4,99,152 Cr.
Current Price 3,630
High / Low 3,964/3,175
Stock P/E37.1
Book Value 649
Dividend Yield0.77 %
ROCE13.4 %
ROE14.7 %
Face Value 2.00
PEG Ratio6.19

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Larsen & Toubro Ltd

Competitors of

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
IITL Projects Ltd 26.4 Cr. 52.9 78.1/16.08.18 70.70.00 %%% 10.0
HB Estate Developers Ltd 198 Cr. 102 125/45.026.6 80.10.00 %7.00 %2.39 % 10.0
Hazoor Multi Projects Ltd 994 Cr. 49.9 63.9/28.411.8 19.50.60 %%% 1.00
Gyan Developers & Builders Ltd 9.11 Cr. 30.4 33.8/7.07 12.70.00 %4.02 %3.75 % 10.0
GG Dandekar Properties Ltd 57.2 Cr. 120 163/87.4 96.90.00 %1.27 %9.45 % 1.00
Industry Average10,784.64N/A33.11N/AN/A21.7822.99N/A

All Competitor Stocks of

Quarterly Result

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales35,59648,08829,33534,77339,56352,85135,85342,76346,39058,33547,88251,02455,128
Expenses29,53140,00726,16330,77833,58144,89230,44336,40039,73649,98141,56643,98447,929
Operating Profit6,0668,0813,1713,9955,9827,9595,4106,3626,6538,3546,3167,0407,199
OPM %17%17%11%11%15%15%15%15%14%14%13%14%13%
Other Income1,2741,0286486295715166957398917411,1461,133838
Interest2,7482,6708277792,2672,1472,2122,3042,3832,3342,2992,2722,344
Depreciation702817717729732769963860825854830910921
Profit before tax3,8905,6232,2753,1163,5545,5582,9293,9374,3365,9074,3324,9914,772
Tax %27%37%32%28%30%28%22%28%29%25%28%23%25%
Net Profit2,8583,6961,5322,2322,5174,1382,2282,7853,0584,4593,0963,8463,593
EPS in Rs17.5723.448.3612.9514.6325.7712.1115.8618.1728.3717.7423.4521.44

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales64,25574,42685,05491,929101,122109,312119,683135,220145,452135,979156,521183,341212,369
Expenses53,57863,03270,96876,24585,63792,69199,572112,354120,899112,519132,207156,349183,460
Operating Profit10,67611,39414,08615,68415,48616,62020,11122,86624,55323,46024,31426,99228,910
OPM %17%15%17%17%15%15%17%17%17%17%16%15%14%
Other Income8862,5231,3371,4221,2191,4661,4652,7013,0158,1112,3643,0653,857
Interest3,0084,6426,4947,2666,8996,8297,7149,33911,02111,7509,2359,4459,250
Depreciation1,5801,6371,4462,6231,7872,3702,2231,9232,4622,9042,9483,5023,515
Profit before tax6,9747,6387,4837,2178,0208,88711,63914,30514,08616,91814,49517,10920,003
Tax %33%31%35%31%30%23%27%28%23%24%29%26%
Net Profit4,7375,2914,8854,9664,5926,4868,00410,21710,89412,92110,41912,53114,993
EPS in Rs34.1337.6935.4134.1730.6443.1752.5963.4868.0282.4761.7074.5091.00
Dividend Payout %21%22%27%32%40%22%30%28%26%44%36%32%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2012-20132013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)11.70%-7.67%1.66%-7.53%41.25%23.40%27.65%6.63%18.61%-19.36%20.27%
Change in YoY Net Profit Growth (%)0.00%-19.37%9.33%-9.19%48.78%-17.84%4.24%-21.02%11.98%-37.97%39.63%

Larsen & Toubro Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2012-2013 to 2022-2023.

Growth

Compounded Sales Growth
10 Years:10%
5 Years:10%
3 Years:18%
TTM:17%
Compounded Profit Growth
10 Years:11%
5 Years:8%
3 Years:-2%
TTM:10%
Stock Price CAGR
10 Years:14%
5 Years:23%
3 Years:25%
1 Year:4%
Return on Equity
10 Years:14%
5 Years:14%
3 Years:12%
Last Year:15%

Last Updated: Unknown

Balance Sheet

Last Updated: November 14, 2024, 8:38 pm

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024Sep 2024
Equity Capital123185186186187280281281281281281275275
Reserves33,73737,52640,72343,99450,03054,62362,09466,44275,58882,12789,04586,08488,955
Borrowings63,14480,84693,63088,13593,954107,524125,555143,174134,629125,508120,650116,322126,183
Other Liabilities45,92450,32458,72761,77567,40080,81290,10696,79099,597111,112119,745136,412141,194
Total Liabilities142,928168,881193,266194,091211,571243,240278,036306,687310,095319,028329,722339,094356,608
Fixed Assets30,38932,39734,73814,17616,67718,58021,19443,65344,31942,94542,64142,96443,284
CWIP11,35114,17914,99310,97413,29813,44313,9193,3115001,2503,0663,0452,561
Investments8,7688,1099,61215,46519,75315,31120,90720,04739,62739,39544,79845,64848,704
Other Assets92,421114,197133,923153,475161,843195,905222,016239,675225,649235,438239,217247,437262,059
Total Assets142,928168,881193,266194,091211,571243,240278,036306,687310,095319,028329,722339,094356,608

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +-4,355-7,143-1,365-3,2406,655-10,031-4,7566,69423,07419,16422,77718,266
Cash from Investing Activity +-6,922-5,510-4,778-4,627-9,7963,914-11,023-8,408-5,750-3,585-8,0482,179
Cash from Financing Activity +11,42913,1367,9037,2532,8969,37015,4406,372-15,274-15,181-11,572-25,413
Net Cash Flow1524831,759-613-2453,254-3384,6582,0493973,156-4,968

Free Cash Flow

MonthMar 2012Mar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Free Cash Flow10.00-52.00-66.00-78.00-73.00-77.00-87.00-103.00-119.00-111.00-101.00-94.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days1131131199496101991021131088981
Inventory Days726976514145514451444132
Days Payable251261288283301349340336401378302255
Cash Conversion Cycle-66-78-92-138-164-203-190-190-236-227-172-143
Working Capital Days928878989810499114103726531
ROCE %12%12%10%11%11%14%13%12%10%10%12%13%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthSep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
FIIs22.86%23.24%22.42%21.09%22.12%23.29%24.48%25.29%25.72%25.50%24.36%22.85%
DIIs33.11%32.71%33.49%34.61%40.49%39.76%38.64%38.01%37.16%37.34%38.08%38.89%
Government0.23%0.23%0.23%0.23%0.23%0.23%0.23%0.23%0.23%0.23%0.23%0.24%
Public43.80%43.82%43.86%44.07%37.17%36.70%36.65%36.47%36.89%36.93%37.33%38.01%
No. of Shareholders13,46,45313,84,81814,92,12415,55,96614,78,38314,18,08614,25,06414,23,20214,07,11714,54,62415,64,08517,36,844

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Nifty 50 ETF22,435,0224.236571.337,417,2682024-12-18202.47%
SBI S&P BSE Sensex ETF15,802,6514.864628.287,417,2682024-12-18113.05%
ICICI Prudential Bluechip Fund10,568,4987.53095.577,417,2682024-12-1842.49%
SBI Blue Chip Fund7,417,2685.632172.557,417,2682024-12-180%
Kotak Flexicap Fund - Regular Plan6,800,0005.071991.757,417,2682024-12-18-8.32%
HDFC Balanced Advantage Fund - Regular Plan5,556,1832.541627.437,417,2682024-12-18-25.09%
SBI Equity Hybrid Fund5,198,4182.571522.647,417,2682024-12-18-29.91%
Axis Bluechip Fund4,676,6674.461369.827,417,2682024-12-18-36.95%
Mirae Asset Large Cap Fund3,652,9673.111069.977,417,2682024-12-18-50.75%
Aditya Birla Sun Life Frontline Equity Fund3,636,3714.631065.117,417,2682024-12-18-50.97%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)93.9674.5161.7182.4968.04
Diluted EPS (Rs.)93.8874.4561.6582.4167.95
Cash EPS (Rs.)140.05114.7494.22112.5794.63
Book Value[Excl.RevalReserv]/Share (Rs.)746.01736.87678.79625.97543.09
Book Value[Incl.RevalReserv]/Share (Rs.)746.01736.87678.79625.97543.09
Revenue From Operations / Share (Rs.)1608.501304.451113.99968.131036.06
PBDIT / Share (Rs.)201.15168.50145.79135.66133.13
PBIT / Share (Rs.)174.37143.58124.81114.98115.59
PBT / Share (Rs.)149.25121.73103.2561.8095.67
Net Profit / Share (Rs.)113.2689.8273.2491.8977.09
NP After MI And SOA / Share (Rs.)95.0074.5061.7082.4768.02
PBDIT Margin (%)12.5012.9113.0814.0112.84
PBIT Margin (%)10.8411.0011.2011.8711.15
PBT Margin (%)9.279.339.266.389.23
Net Profit Margin (%)7.046.886.579.497.44
NP After MI And SOA Margin (%)5.905.715.538.516.56
Return on Networth / Equity (%)15.1211.7210.5215.2614.31
Return on Capital Employeed (%)14.7011.9910.919.289.93
Return On Assets (%)3.843.162.703.723.09
Long Term Debt / Equity (X)0.650.680.741.071.21
Total Debt / Equity (X)1.321.331.501.732.09
Asset Turnover Ratio (%)0.660.440.420.320.39
Current Ratio (X)1.231.371.311.421.26
Quick Ratio (X)1.201.331.271.381.22
Inventory Turnover Ratio (X)2.892.812.811.321.19
Dividend Payout Ratio (NP) (%)32.2929.5229.1631.5141.15
Dividend Payout Ratio (CP) (%)25.1822.1221.7625.2032.71
Earning Retention Ratio (%)67.7170.4870.8468.4958.85
Cash Earning Retention Ratio (%)74.8277.8878.2474.8067.29
Interest Coverage Ratio (X)7.807.386.554.876.68
Interest Coverage Ratio (Post Tax) (X)5.364.894.263.104.64
Enterprise Value (Cr.)633678.46414490.66365816.69327629.64248683.84
EV / Net Operating Revenue (X)2.872.262.342.411.71
EV / EBITDA (X)22.9217.5017.8617.2013.31
MarketCap / Net Operating Revenue (X)2.351.661.591.470.77
Retention Ratios (%)67.7070.4770.8368.4858.84
Price / BV (X)6.013.413.012.631.70
Price / Net Operating Revenue (X)2.351.661.591.470.77
EarningsYield0.020.030.030.050.08

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Larsen & Toubro Ltd as of December 21, 2024 is: 3,566.71

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of December 21, 2024, Larsen & Toubro Ltd is Overvalued by 1.74% compared to the current share price 3,630.00

Intrinsic Value of Larsen & Toubro Ltd as of December 21, 2024 is: 3,780.50

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of December 21, 2024, Larsen & Toubro Ltd is Undervalued by 4.15% compared to the current share price 3,630.00

Last 5 Year EPS CAGR: 5.99%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a low average Cash Conversion Cycle of -158.25, which is a positive sign.
  2. The company has shown consistent growth in sales (123.77 cr) and profit (11.46 cr) over the years.
  1. The stock has a low average ROCE of 11.67%, which may not be favorable.
  2. The stock has a high average Working Capital Days of 86.83, which may not be favorable.
  3. The company has higher borrowings (109,173.38) compared to reserves (62,382.15), which may suggest financial risk.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Larsen & Toubro Ltd:
    1. Net Profit Margin: 7.04%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 14.7% (Industry Average ROCE: 21.78%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 15.12% (Industry Average ROE: 22.99%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 5.36
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 1.2
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 37.1 (Industry average Stock P/E: 33.11)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 1.32
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Larsen & Toubro Ltd. is a Public Limited Listed company incorporated on 07/02/1946 and has its registered office in the State of Maharashtra, India. Company’s Corporate Identification Number(CIN) is L99999MH1946PLC004768 and registration number is 004768. Currently Company is involved in the business activities of Construction of utility projects. Company’s Total Operating Revenue is Rs. 101000.41 Cr. and Equity Capital is Rs. 281.01 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
Construction, Contracting & EngineeringL&T House, Mumbai Maharashtra 400001igrc@larsentoubro.com
http://www.larsentoubro.com
Management
NamePosition Held
Mr. S N SubrahmanyanChairman & Managing Director
Mr. R Shankar RamanWholeTime Director & CFO
Mr. Subramanian SarmaPresident & Wholetime Director
Mr. S V DesaiWholeTime Director & Sr.Exe.VP
Mr. T Madhava DasWholeTime Director & Sr.Exe.VP
Mr. Anil V ParabWholeTime Director & Sr.Exe.VP
Mr. Siddhartha MohantyNominee Director
Mr. P R RameshIndependent Director
Mr. Ajay TyagiIndependent Director
Mr. Jyoti SagarIndependent Director
Mr. Rajnish KumarIndependent Director
Mr. Adil Siraj ZainulbhaiIndependent Director
Mr. Pramit JhaveriIndependent Director
Mrs. Preetha ReddyIndependent Director
Mr. Sanjeev AgaIndependent Director
Mr. Narayanan KumarIndependent Director

FAQ

What is the latest intrinsic value of Larsen & Toubro Ltd?

The latest intrinsic value of Larsen & Toubro Ltd as on 21 December 2024 is ₹3566.71, which is 1.74% lower than the current market price of ₹3,630.00. The stock has a market capitalization of 4,99,152 Cr. and recorded a high/low of 3,964/3,175 during the current fiscal year 2024-2025. As of Sep 2024, the company has reserves of ₹88,955 Cr and total liabilities of ₹356,608 Cr.

What is the Market Cap of Larsen & Toubro Ltd?

The Market Cap of Larsen & Toubro Ltd is 4,99,152 Cr..

What is the current Stock Price of Larsen & Toubro Ltd as on 21 December 2024?

The current stock price of Larsen & Toubro Ltd as on 21 December 2024 is 3,630.

What is the High / Low of Larsen & Toubro Ltd stocks in FY 2024-2025?

In FY 2024-2025, the High / Low of Larsen & Toubro Ltd stocks is 3,964/3,175.

What is the Stock P/E of Larsen & Toubro Ltd?

The Stock P/E of Larsen & Toubro Ltd is 37.1.

What is the Book Value of Larsen & Toubro Ltd?

The Book Value of Larsen & Toubro Ltd is 649.

What is the Dividend Yield of Larsen & Toubro Ltd?

The Dividend Yield of Larsen & Toubro Ltd is 0.77 %.

What is the ROCE of Larsen & Toubro Ltd?

The ROCE of Larsen & Toubro Ltd is 13.4 %.

What is the ROE of Larsen & Toubro Ltd?

The ROE of Larsen & Toubro Ltd is 14.7 %.

What is the Face Value of Larsen & Toubro Ltd?

The Face Value of Larsen & Toubro Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Larsen & Toubro Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE