Larsen & Toubro
NSE: LT•Infrastructure & Defense
Current Price
₹3,650
TECH-FUNDA™
Positive
The undisputed bellwether of Indian infrastructure, capital goods, defense engineering, and green hydrogen EPC execution.
Price to Earnings (P/E)
31.5
Trailing Twelve Months
Return on Equity (ROE)
14.2%
Shareholder Capital Return
Price to Book (P/B)
4.2x P/B
Asset Backing
Enterprise Multiple
19.2x
EV / EBITDA
Fundamental Quality Core
3-Stage DuPont ROE Decomposition
ROE = Net Margin × Asset Turnover × Equity Multiplier
1. Operating Margin
6.2%
Operating efficiency and pricing power translation to net earnings.
2. Asset Turnover
0.85x
Capital velocity; revenue generated per rupee of assets deployed.
3. Financial Leverage
2.70x
Total assets divided by net worth; leverage multiplier to equity.
DuPont Assessment: Leverage and asset turnover are improving as domestic capex cycle and order executions accelerate.
01 · BUSINESS
Business Quality & Moat
Competitive Moat: Unrivaled domestic pre-qualification capabilities for mega-scale infrastructure and defense contracts.
Pricing Power: Strong cost-indexation clauses protecting margins against raw material price shocks.
Growth Catalysts: National capex push (roads, railways, defense manufacturing) and Middle East hydrocarbon EPC contracts.
02 · FUNDAMENTALS
Financial & Balance Sheet
Balance Sheet Health: Debt-to-equity declining steadily as non-core concession assets are monetized.
Cash Flow Dynamics: Strong advance collections and customer milestone billings supporting operating liquidity.
Capital Discipline: Net working capital as a percentage of revenue tightening towards target levels (16-18%).
03 · VALUE
Valuation Intelligence
Price Multiple Context: Trading at 31.5 P/E and 4.2x P/B.
Historical Benchmark: Commanding a deserved scarcity premium as the primary proxy for India's capital expenditure boom.
04 · RISK
Risk & Downside Watch
Corporate Governance: Professionally managed board with high institutional ownership.
Execution Headwinds: Complex mega-project timeline execution risks and raw material supply volatility.
Economic Sensitivity: Dependent on central government budgetary infrastructure allocation momentum.
TECH-FUNDA™ RESEARCH PIPELINE
Market Filter→Business Moat→DuPont ROE→Valuation Margin→Active Thesis