DB:LTO

Stock Analysis Report

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Executive Summary

Larsen & Toubro Limited engages in the technology, engineering, construction, manufacturing, IT, and financial operations worldwide.


Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Larsen & Toubro's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LTO's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

13.5%

LTO

9.5%

DE Construction

6.8%

DE Market


1 Year Return

-37.8%

LTO

-20.4%

DE Construction

5.6%

DE Market

Return vs Industry: LTO underperformed the German Construction industry which returned -19.7% over the past year.

Return vs Market: LTO underperformed the German Market which returned 4.4% over the past year.


Shareholder returns

LTOIndustryMarket
7 Day13.5%9.5%6.8%
30 Day20.0%26.9%14.0%
90 Day-12.1%7.7%7.5%
1 Year-36.4%-37.8%-14.0%-20.4%7.4%5.6%
3 Year-24.3%-27.7%-39.8%-47.7%0.3%-7.3%
5 Year-17.0%-22.3%49.2%25.9%12.4%-2.0%

Price Volatility Vs. Market

How volatile is Larsen & Toubro's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Larsen & Toubro undervalued compared to its fair value and its price relative to the market?

13.94x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: LTO (€11.96) is trading above our estimate of fair value (€4.79)

Significantly Below Fair Value: LTO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: LTO is poor value based on its PE Ratio (13.9x) compared to the Construction industry average (11x).

PE vs Market: LTO is good value based on its PE Ratio (13.9x) compared to the German market (20.1x).


Price to Earnings Growth Ratio

PEG Ratio: LTO is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: LTO is overvalued based on its PB Ratio (2.1x) compared to the XE Construction industry average (1.1x).


Next Steps

Future Growth

How is Larsen & Toubro forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

10.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LTO's forecast earnings growth (10% per year) is above the savings rate (0.2%).

Earnings vs Market: LTO's earnings (10% per year) are forecast to grow slower than the German market (22.5% per year).

High Growth Earnings: LTO's earnings are forecast to grow, but not significantly.

Revenue vs Market: LTO's revenue (7.5% per year) is forecast to grow faster than the German market (5.7% per year).

High Growth Revenue: LTO's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LTO's Return on Equity is forecast to be low in 3 years time (13.2%).


Next Steps

Past Performance

How has Larsen & Toubro performed over the past 5 years?

16.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LTO has high quality earnings.

Growing Profit Margin: LTO's current net profit margins (6.3%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: LTO's earnings have grown by 16.3% per year over the past 5 years.

Accelerating Growth: LTO's earnings growth over the past year (11.2%) is below its 5-year average (16.3% per year).

Earnings vs Industry: LTO earnings growth over the past year (11.2%) exceeded the Construction industry 7.6%.


Return on Equity

High ROE: LTO's Return on Equity (15.1%) is considered low.


Next Steps

Financial Health

How is Larsen & Toubro's financial position?


Financial Position Analysis

Short Term Liabilities: LTO's short term assets (₹1,661.1B) exceed its short term liabilities (₹1,410.3B).

Long Term Liabilities: LTO's short term assets (₹1,661.1B) exceed its long term liabilities (₹728.9B).


Debt to Equity History and Analysis

Debt Level: LTO's debt to equity ratio (183.7%) is considered high.

Reducing Debt: LTO's debt to equity ratio has reduced from 196.9% to 183.7% over the past 5 years.

Debt Coverage: LTO's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: LTO's interest payments on its debt are well covered by EBIT (7.3x coverage).


Balance Sheet


Next Steps

Dividend

What is Larsen & Toubro's current dividend yield, its reliability and sustainability?

2.09%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: LTO's dividend (2.09%) is higher than the bottom 25% of dividend payers in the German market (1.27%).

High Dividend: LTO's dividend (2.09%) is low compared to the top 25% of dividend payers in the German market (3.75%).


Stability and Growth of Payments

Stable Dividend: LTO's dividends per share have been stable in the past 10 years.

Growing Dividend: LTO's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.3%), LTO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: LTO's dividends in 3 years are forecast to be well covered by earnings (30.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure


CEO

SNS Subrahmanyan (59yo)

2.92yrs

Tenure

₹484,540,000

Compensation

Mr. Sekharipuram Narayanan Subrahmanyan, also known as SNS, has been Chief Executive Officer and Managing Director of Larsen & Toubro Limited since July 1, 2017. Mr. Subrahmanyan serves as Chief Executive  ...


CEO Compensation Analysis

Compensation vs Market: SNS's total compensation ($USD6.42M) is above average for companies of similar size in the German market ($USD4.77M).

Compensation vs Earnings: SNS's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Sekharipuram Subrahmanyan
CEO, MD & Whole Time Director2.92yrs₹484.54m0.0059% 931.5k
Ramamurthi Raman
CFO & Whole-Time Director8.67yrs₹250.75m0.023% 3.7m
Shailendra Roy
Senior EVP of Power & Whole Time Director8.25yrs₹141.21m0.0062% 973.9k
Dip Sen
Senior EVP of Infrastructure & Whole-Time Director4.67yrs₹69.98m0.0033% 514.4k
M. Satish
Senior EVP of Buildings4.42yrs₹93.83m0.0035% 550.4k
Jayant Patil
Senior EVP of Defense & Smart Technologies and Whole-Time Director2.92yrs₹82.23m0.012% 1.9m
Marnix Coomans
Technical Headno datano datano data
Bahadur Hitendra
Head of Administrationno datano datano data
Arnob Mondal
Vice President of Corporate Account & Investor Relationsno datano data0.000070% 11.0k
Kumar Hemant
Group General Counselno datano datano data

4.5yrs

Average Tenure

62yo

Average Age

Experienced Management: LTO's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Sekharipuram Subrahmanyan
CEO, MD & Whole Time Director2.92yrs₹484.54m0.0059% 931.5k
Ramamurthi Raman
CFO & Whole-Time Director8.67yrs₹250.75m0.023% 3.7m
Shailendra Roy
Senior EVP of Power & Whole Time Director8.25yrs₹141.21m0.0062% 973.9k
Dip Sen
Senior EVP of Infrastructure & Whole-Time Director4.67yrs₹69.98m0.0033% 514.4k
M. Satish
Senior EVP of Buildings4.42yrs₹93.83m0.0035% 550.4k
Jayant Patil
Senior EVP of Defense & Smart Technologies and Whole-Time Director2.92yrs₹82.23m0.012% 1.9m
Subodh Bhargava
Independent Director12.92yrs₹6.53m0.000080% 12.5k
Anilkumar Naik
Group Chairman7.67yrs₹81.55m0.045% 7.0m
Mukund Chitale
Independent Directorno data₹5.07m0.00017% 26.7k
Sunita Sharma
Non-Executive Director5.17yrs₹330.00k0.000010% 1.6k

7.7yrs

Average Tenure

64yo

Average Age

Experienced Board: LTO's board of directors are considered experienced (7.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Larsen & Toubro Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Larsen & Toubro Limited
  • Ticker: LTO
  • Exchange: DB
  • Founded: 1938
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: ₹1.341t
  • Listing Market Cap: ₹15.682b
  • Shares outstanding: 1.40b
  • Website: https://www.larsentoubro.com

Number of Employees


Location

  • Larsen & Toubro Limited
  • L&T House
  • N.M. Marg
  • Mumbai
  • Maharashtra
  • 400001
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LTOU.FOTCPK (Pink Sheets LLC)SPON GDR EA REPR 1 ORD REG SUSUSDDec 1994
LS&TBBDL (Bourse de Luxembourg)SPON GDR EA REPR 1 ORD REG SLUUSDDec 1994
LTODLSE (London Stock Exchange)SPON GDR EA REPR 1 ORD REG SGBUSDDec 1994
LTODB (Deutsche Boerse AG)SPON GDR EA REPR 1 ORD REG SDEEURDec 1994
LTODLBATS-CHIXE (BATS 'Chi-X Europe')SPON GDR EA REPR 1 ORD REG SGBUSDDec 1994
500510BSE (Mumbai Stock Exchange)YesEquity SharesININRFeb 1998
LTNSEI (National Stock Exchange of India)YesEquity SharesININRFeb 1998

Biography

Larsen & Toubro Limited engages in the technology, engineering, construction, manufacturing, IT, and financial operations worldwide. The Infrastructure segment engineers and constructs building and factories, transportation infrastructure, heavy civil infrastructure, power transmission and distribution, water and effluent treatment, smart world, and communication projects, as well as metallurgical and material handling systems. The Power segment offers turnkey solutions for coal-based and gas-based thermal power plants, including power generation equipment with related systems and balance-of-plant packages. The Heavy Engineering segment manufactures and supplies custom designed, engineered critical equipment and systems to the fertiliser, refinery, petrochemical, chemical, oil and gas, and thermal and nuclear power industries. The Defence Engineering segment designs, develops, prototypes, produces, delivers, commissions, and supports equipment, systems, and platforms for the defence and aerospace sectors. It also designs, constructs, commissions, repairs/refits, and upgrades of naval and coast guard vessels. The Electrical & Automation segment manufactures and sells low and medium voltage switchgear components, custom built low and medium voltage switchboards, electronic energy meters/protection (relays) systems, and control and automation products. The Realty segment develops and lease properties. The Others segment offers hydrocarbon; markets and services construction and mining machinery and parts; and manufactures and sells rubber processing machinery. The company was founded in 1938 and is headquartered in Mumbai, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/05 21:36
End of Day Share Price2020/06/05 00:00
Earnings2019/12/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.