Larsen & Toubro Limited Fundamental Analysis
Larsen & Toubro Limited (LT.NS) shows weak financial fundamentals with a PE ratio of 34.36, profit margin of 5.60%, and ROE of 15.18%. The company generates $2872.1B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 58.3/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze LT.NS's fundamental strength across five key dimensions:
Efficiency Score
WeakLT.NS struggles to generate sufficient returns from assets.
Valuation Score
WeakLT.NS trades at a premium to fair value.
Growth Score
ModerateLT.NS shows steady but slowing expansion.
Financial Health Score
ModerateLT.NS shows balanced financial health with some risks.
Profitability Score
ModerateLT.NS maintains healthy but balanced margins.
Key Financial Metrics
Is LT.NS Expensive or Cheap?
P/E Ratio
LT.NS trades at 34.36 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, LT.NS's PEG of 3.06 indicates potential overvaluation.
Price to Book
The market values Larsen & Toubro Limited at 5.26 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.55 times EBITDA. This signals the market has high growth expectations.
How Well Does LT.NS Make Money?
Net Profit Margin
For every $100 in sales, Larsen & Toubro Limited keeps $5.60 as profit after all expenses.
Operating Margin
Core operations generate 9.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $15.18 in profit for every $100 of shareholder equity.
ROA
Larsen & Toubro Limited generates $3.55 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Larsen & Toubro Limited generates limited operating cash flow of $38.16B, signaling weaker underlying cash strength.
Free Cash Flow
Larsen & Toubro Limited generates weak or negative free cash flow of $11.41B, restricting financial flexibility.
FCF Per Share
Each share generates $8.30 in free cash annually.
FCF Yield
LT.NS converts 0.20% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.36
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.06
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.26
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.002
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.15
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.25
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.15
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How LT.NS Stacks Against Its Sector Peers
| Metric | LT.NS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.36 | 34.45 | Neutral |
| ROE | 15.18% | 1169.00% | Weak |
| Net Margin | 5.60% | -29218.00% (disorted) | Weak |
| Debt/Equity | 1.15 | 0.46 | Weak (High Leverage) |
| Current Ratio | 1.25 | 25.49 | Neutral |
| ROA | 3.55% | -1353142.00% (disorted) | Weak |
LT.NS outperforms its industry in 0 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Larsen & Toubro Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
EPS CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
FCF CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure