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:
19%
Stock Price CAGR
10 Years:
14%
5 Years:
19%
3 Years:
26%
1 Year:
12%
Return on Equity
10 Years:
14%
5 Years:
14%
3 Years:
12%
Last Year:
15%
Last Updated: Unknown
Balance Sheet
Last Updated: Unknown
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Equity Capital
123
185
186
186
187
280
281
281
281
281
281
275
Reserves
33,737
37,526
40,723
43,994
50,030
54,623
62,094
66,442
75,588
82,127
89,045
86,084
Borrowings
63,144
80,846
93,630
88,135
93,954
107,524
125,555
143,174
134,629
125,508
120,650
116,322
Other Liabilities
45,924
50,324
58,727
61,775
67,400
80,812
90,106
96,790
99,597
111,112
119,745
136,412
Total Liabilities
142,928
168,881
193,266
194,091
211,571
243,240
278,036
306,687
310,095
319,028
329,722
339,094
Fixed Assets
30,389
32,397
34,738
14,176
16,677
18,580
21,194
43,653
44,319
42,945
42,641
42,964
CWIP
11,351
14,179
14,993
10,974
13,298
13,443
13,919
3,311
500
1,250
3,066
3,045
Investments
8,768
8,109
9,612
15,465
19,753
15,311
20,907
20,047
39,627
39,395
44,798
45,648
Other Assets
92,421
114,197
133,923
153,475
161,843
195,905
222,016
239,675
225,649
235,438
239,217
247,437
Total Assets
142,928
168,881
193,266
194,091
211,571
243,240
278,036
306,687
310,095
319,028
329,722
339,094
Reserves and Borrowings Chart
Cash Flow
Month
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Mar 2024
Cash from Operating ActivityÂ
-4,355
-7,143
-1,365
-3,240
6,655
-10,031
-4,756
6,694
23,074
19,164
22,777
18,266
Cash from Investing ActivityÂ
-6,922
-5,510
-4,778
-4,627
-9,796
3,914
-11,023
-8,408
-5,750
-3,585
-8,048
2,179
Cash from Financing ActivityÂ
11,429
13,136
7,903
7,253
2,896
9,370
15,440
6,372
-15,274
-15,181
-11,572
-25,413
Net Cash Flow
152
483
1,759
-613
-245
3,254
-338
4,658
2,049
397
3,156
-4,968
Free Cash Flow
Month
Mar 2012
Mar 2013
Mar 2014
Mar 2015
Mar 2016
Mar 2017
Mar 2018
Mar 2019
Mar 2020
Mar 2021
Mar 2022
Mar 2023
Free Cash Flow
10.00
-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.
Fair Value of Larsen & Toubro Ltd as of October 11, 2024 is: ₹3,331.68
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 October 11, 2024, Larsen & Toubro Ltd is Overvalued by 3.71% compared to the current share price ₹3,460.00
Intrinsic Value of Larsen & Toubro Ltd as of October 11, 2024 is: ₹3,531.38
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 October 11, 2024, Larsen & Toubro Ltd is Undervalued by 2.06% compared to the current share price ₹3,460.00
Last 5 Year EPS CAGR: 5.99%
*Investments are subject to market risks
Strength and Weakness
Strength
Weakness
The stock has a low average Cash Conversion Cycle of -158.25, which is a positive sign.
The company has shown consistent growth in sales (123.77 cr) and profit (11.46 cr) over the years.
The stock has a low average ROCE of 11.67%, which may not be favorable.
The stock has a high average Working Capital Days of 86.83, which may not be favorable.
The company has higher borrowings (107,755.92) compared to reserves (60,167.75), 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:
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.
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.
ROE%: 15.12% (Industry Average ROE: 15.01%)
ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
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.
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.
Stock P/E: 35.8 (Industry average Stock P/E: 31.85)
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.
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.
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
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