Larsen & Toubro Limited

Industrials — Engineering & Construction · NSE

₹3,627.10−₹4.90 (−0.13%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by moderate debt load.

In simple words: Reasonable but unspectacular business quality, with modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

The 60-second version of Larsen & Toubro Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Larsen & Toubro Limited engages in engineering, procurement, and construction projects (EPC) in India and internationally. The company operates through four segments: Infrastructure Projects, Energy Projects, Hi-Tech Manufacturing, and Others.

IndustryEngineering & Construction

SectorIndustrials

Employees55,662

Annual revenue₹2.84 L Cr

How does it make money?

Turns over ₹2.84 L Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 55,662 employees supports ₹5.11 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.11 Cr

Who are its competitors?

The closest listed comparisons in its industry are ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 14.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE14.1%

What is the outlook?

23 analysts covering the stock expect revenue to grow about 16.4% and earnings to grow about 21.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+16.4%

Est. earnings growth+21.6%

Analysts23

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +56% while net margin moved -2% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+56%

Margin effect-2%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

• ROCE of 14.6% is adequate but not distinctive
• ROCE has been broadly stable
• EBITDA margin of 12.8% is respectable
✗ Net margin of 5.6% is slim
• Revenue has compounded at 16.1% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

65/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

66/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

30.1x

3Y Median

38.4x

40 monthly readings · mean 39.1x · range 31.0x–51.2x

Sector Median

59.4x

median of 2 sector peers

🟢Current valuation is approximately 22% below its 3y median of 38.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 49% below the peer median of 59.4x.

vs. its own history

Cheap

38.4x median over 40 months · -22%

vs. sector peers

Cheap

59.4x median of 2 peers · -49%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.8x

PEG

1.96

What's Good / What's Bad

🟢 What's Going Well2

Return on capital is rising
ROCE has improved from 12.1% to 14.6%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Margins are compressing
EBITDA margin has slipped from 14.4% to 12.8% over 3 years.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 22% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 49% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 14.4% to 12.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 12% a year✓ 16.1% CAGR
Latest reported year was 8.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✓ ₹11,932 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 12%✓ 14.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 7 neutral · 0 weak

Market Cap

₹4.99 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

30.1x

Fair

Fairly valued against the generic band

P/B Ratio

4.57x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹120.55

Profitable

Profitable on a per-share basis

ROE

14.7%

Moderate

Moderate capital efficiency

ROCE

14.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.98x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.1%

Modest

Modest growth

Profit Growth (YoY)

14.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.05%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹11,932 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

20.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.6%

Average

Average margins

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

1.25

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

29%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3752.2 / 3906.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1.82 L Cr	₹2.19 L Cr	₹2.54 L Cr	₹2.84 L Cr	+16.1%
EBITDA	₹26,161 Cr	₹28,861 Cr	₹33,648 Cr	₹36,334 Cr	+11.6%
EBITDA Margin	14.4%	13.2%	13.2%	12.8%	—
PAT (Net Profit)	₹10,471 Cr	₹13,059 Cr	₹15,037 Cr	₹16,084 Cr	+15.4%
EPS	₹74.45	₹93.88	₹109.28	₹116.88	+16.2%
ROE	11.7%	15.1%	15.4%	14.7%	—
ROCE	12.1%	14.8%	15.2%	14.6%	—
Total Debt	₹1.21 L Cr	₹1.16 L Cr	₹1.32 L Cr	₹1.25 L Cr	+1.3%
Free Cash Flow	₹18,633 Cr	₹13,750 Cr	₹4,733 Cr	₹11,932 Cr	-13.8%

🟢 Revenue has grown at 16.1% a year over 3 years.

🟢 EBITDA has grown at 11.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 14.4% to 12.8% over 3 years (-1.6 pts).

🟢 PAT (Net Profit) has grown at 15.4% a year over 3 years.

🟢 EPS has grown at 16.2% a year over 3 years.

🟢 ROE has risen from 11.7% to 14.7% over 3 years (+3.0 pts).

🟢 ROCE has risen from 12.1% to 14.6% over 3 years (+2.5 pts).

🟡 Total Debt has been broadly flat over 3 years (1.3% a year).

🔴 Free Cash Flow has shrunk at 13.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4.53 L Cr

Total Liabilities

₹3.24 L Cr

Cash & Equivalents

₹15,391 Cr

Operating Cash Flow

₹16,741 Cr

Capex

-₹4,809 Cr

Shareholding (proxy)

Institutional Holding

52.5%

Insider Holding

14.8%

Corporate Actions

Next Earnings

27 Oct 2026

Dividend Rate

₹38

Ex-Dividend Date

22 May 2026

Analyst Consensus

Recommendations

23 Buy · 4 Hold · 2 Sell

Target Price (Mean)

₹4,501.71

+24.1% vs CMP

Target Range

₹3,550 – ₹5,060

Peer Comparison

Company	P/E	ROE
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

3 mixed3 general

Stocks to buy: Ganesh Dongre of Anand Rathi recommends Larsen and Toubro, Equitas, Bajaj Finance shares | Target, SL

Livemint, 18 Oct

L&T shares get their highest target from JPMorgan based on these key takeaways

CNBC TV18, 22 Sept

Larsen & Toubro shares: 114% return in 5 yrs, Motilal Oswal sees 19% more upside stock | Target price

IndiaIPO, 10 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Larsen & Toubro gains 4%; should investors buy the stock post Q1 results?

Business Standard, 29 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

If EPS Growth Is Important To You, Larsen & Toubro (NSE:LT) Presents An Opportunity

Simply Wall Street, 31 Aug

L&T Q2 Results: Check Date, Time, Earnings Schedule, Share Price History And More

NDTV Profit, 13 OctResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Risk

MiddlingBusiness Quality · Profitability · Valuation

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

1 of 5 tripwires tripped — Debt / EBITDA falls below 3x · see Key things to watch ↑