Larsen & Toubro Valuation

Is LT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LT (₹3499.8) is trading above our estimate of fair value (₹1909.46)

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


Key Valuation Metric

Which metric is best to use when looking at relative valuation for LT?

Other financial metrics that can be useful for relative valuation.

LT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.6x
Enterprise Value/EBITDA21.4x
PEG Ratio1.6x

Price to Earnings Ratio vs Peers

How does LT's PE Ratio compare to its peers?

The above table shows the PE ratio for LT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average90.3x
RVNL Rail Vikas Nigam
40.7x7.0%₹592.4b
VOLTAS Voltas
176.6x42.8%₹493.5b
IRB IRB Infrastructure Developers
77x34.0%₹421.2b
534309 NBCC (India)
66.8x18.6%₹249.7b
LT Larsen & Toubro
38x23.2%₹4.8t

Price-To-Earnings vs Peers: LT is good value based on its Price-To-Earnings Ratio (38x) compared to the peer average (90.3x).


Price to Earnings Ratio vs Industry

How does LT's PE Ratio compare vs other companies in the IN Construction Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a23.9%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a23.9%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: LT is expensive based on its Price-To-Earnings Ratio (38x) compared to the Indian Construction industry average (28.5x).


Price to Earnings Ratio vs Fair Ratio

What is LT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio38x
Fair PE Ratio60.8x

Price-To-Earnings vs Fair Ratio: LT is good value based on its Price-To-Earnings Ratio (38x) compared to the estimated Fair Price-To-Earnings Ratio (60.8x).


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst LT forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current₹3,499.80
₹3,960.68
+13.2%
11.7%₹4,410.00₹1,921.00n/a34
Apr ’25₹3,838.00
₹3,920.03
+2.1%
11.8%₹4,400.00₹1,874.00n/a32
Mar ’25₹3,633.50
₹3,910.94
+7.6%
11.7%₹4,400.00₹1,874.00n/a32
Feb ’25₹3,398.00
₹3,870.23
+13.9%
13.1%₹4,400.00₹1,874.00n/a30
Jan ’25₹3,525.45
₹3,282.84
-6.9%
12.2%₹4,000.00₹1,854.00n/a31
Dec ’24₹3,190.65
₹3,215.13
+0.8%
11.6%₹3,600.00₹1,854.00n/a31
Nov ’24₹2,895.30
₹3,160.47
+9.2%
12.3%₹3,600.00₹1,854.00n/a32
Oct ’24₹3,023.55
₹2,905.44
-3.9%
10.6%₹3,600.00₹1,921.00n/a34
Sep ’24₹2,702.10
₹2,815.34
+4.2%
8.6%₹3,080.00₹1,721.00n/a35
Aug ’24₹2,666.65
₹2,807.50
+5.3%
8.6%₹3,080.00₹1,721.00n/a36
Jul ’24₹2,475.55
₹2,559.44
+3.4%
8.9%₹2,900.00₹1,666.00n/a34
Jun ’24₹2,207.80
₹2,537.31
+14.9%
8.9%₹2,900.00₹1,666.00n/a35
May ’24₹2,364.40
₹2,472.51
+4.6%
8.7%₹2,827.00₹1,520.00₹3,594.3035
Apr ’24₹2,164.20
₹2,421.71
+11.9%
8.6%₹2,827.00₹1,520.00₹3,838.0035
Mar ’24₹2,115.30
₹2,400.25
+13.5%
8.3%₹2,770.00₹1,520.00₹3,633.5036
Feb ’24₹2,145.55
₹2,376.92
+10.8%
8.6%₹2,650.00₹1,520.00₹3,398.0036
Jan ’24₹2,085.80
₹2,272.08
+8.9%
8.5%₹2,500.00₹1,420.00₹3,525.4536
Dec ’23₹2,104.25
₹2,237.94
+6.4%
8.9%₹2,465.00₹1,420.00₹3,190.6534
Nov ’23₹2,024.45
₹2,211.88
+9.3%
8.9%₹2,455.00₹1,420.00₹2,895.3033
Oct ’23₹1,847.70
₹2,072.25
+12.2%
8.0%₹2,370.00₹1,420.00₹3,023.5532
Sep ’23₹1,912.95
₹2,052.41
+7.3%
8.0%₹2,370.00₹1,420.00₹2,702.1032
Aug ’23₹1,814.70
₹2,035.71
+12.2%
8.4%₹2,370.00₹1,370.00₹2,666.6535
Jul ’23₹1,572.15
₹1,990.61
+26.6%
9.0%₹2,357.00₹1,370.00₹2,475.5533
Jun ’23₹1,648.00
₹2,004.67
+21.6%
8.7%₹2,357.00₹1,473.00₹2,207.8033
May ’23₹1,694.35
₹2,233.82
+31.8%
7.8%₹2,525.00₹1,473.00₹2,364.4034

Analyst Forecast: Target price is less than 20% higher than the current share price.


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