| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 0.20 | -100 |
| Intrinsic value (DCF) | 19.05 | -55 |
| Graham-Dodd Method | 3.70 | -91 |
| Graham Formula | n/a |
Larsen & Toubro Limited (L&T) is a leading Indian multinational conglomerate specializing in engineering, construction, and manufacturing. Headquartered in Mumbai, L&T operates across diverse segments including infrastructure, hydrocarbon, power, heavy engineering, defense, and digital platforms. The company is renowned for its turnkey solutions in critical sectors such as oil & gas, power generation, and defense, leveraging its expertise in engineering and project execution. With a strong presence in global markets, L&T has established itself as a key player in infrastructure development, contributing significantly to India's industrial growth. The company also ventures into digital transformation through platforms like SuFin (B2B e-commerce) and EduTech (professional skilling), reinforcing its adaptability in evolving markets. Founded in 1938, L&T continues to drive innovation and sustainability in the industrials sector, making it a cornerstone of India's engineering prowess.
Larsen & Toubro presents a compelling investment case due to its diversified business model, strong order book, and leadership in India's infrastructure and engineering sectors. The company's robust revenue ($743.9B) and net income ($54.97B) reflect its operational efficiency, while a healthy operating cash flow ($91.6B) supports growth initiatives. However, high total debt ($1.32T) and capital expenditures ($44.19B) pose financial risks. L&T's low beta (0.423) suggests relative stability compared to market volatility, making it attractive for conservative investors. The dividend yield (~0.33 per share) adds income appeal. Investors should monitor execution risks in large-scale projects and macroeconomic factors affecting infrastructure spending.
L&T holds a competitive edge through its diversified portfolio and strong execution capabilities in complex engineering projects. Its infrastructure segment benefits from India's growing urbanization and government-led infrastructure investments. The hydrocarbon and power segments capitalize on energy demand, while defense engineering aligns with India's push for indigenous defense manufacturing. L&T's heavy engineering division serves niche markets with high entry barriers, further solidifying its moat. However, competition is intense in construction and engineering, with rivals like Tata Projects and Punj Lloyd vying for contracts. L&T's digital ventures (SuFin, EduTech) differentiate it from traditional peers but face competition from specialized tech firms. The company's scale, technical expertise, and government contracts provide resilience, though margin pressures from rising input costs and project delays remain challenges. Its global footprint also positions it against multinational giants like Bechtel and Fluor.