Larsen & Toubro Ltd.
Infrastructure · NSE
52-week range
₹3,254 – ₹4,440
From 52w high
-10.5%
RSI (14)
50.1
vs SMA 50 / 200
↑ 50 · ↑ 200
Larsen and Toubro (LT) is a diversified infrastructure and engineering conglomerate trading at Rs 3,974.50, up 20.32% over the past 12 months and currently above both its 50-DMA (Rs 3,892.65) and 200-DMA (Rs 3,861.11). The trailing PE of 34.0 is the lowest among the six tracked infrastructure peers (next lowest: BEL at 53.7), while a forward PE of 21.7 reflects analyst expectations of earnings improvement. The company reported a 3% YoY decline in Q4 FY26 net profit to Rs 5,326 crore alongside a Rs 38/share dividend, against a backdrop of 5-year revenue CAGR of 11.7% but earnings CAGR of -3.1%.
- ✓Lowest PE in tracked peer group at 34.0 vs next-lowest peer BEL at 53.7 and sector peers ranging up to 113.8 (CGPOWER), indicating LT trades at a significant valuation discount relative to the infrastructure sector universe.
- ✓Forward PE of 21.7 compresses 37% from the trailing PE of 34.0, reflecting analyst consensus that earnings are expected to recover materially from the current depressed level.
- ✓Price is 20.32% higher over 12 months and sits above both the 50-DMA and 200-DMA with RSI at 50.09 (neutral), indicating neither overbought nor oversold technical conditions.
- ✓FCF was positive in 4 of the tracked years, and the company declared a Rs 38/share dividend in Q4 FY26, suggesting sufficient cash generation to sustain shareholder distributions despite thin profit margins.
- ✗5-year earnings CAGR of -3.1% against 11.7% revenue CAGR indicates a sustained and widening gap between topline growth and bottom-line delivery; profit margin of 5.52% is thin for a company at this scale.
- ✗Quality score of 24 ranks 5th of 6 among tracked peers, the weakest in the sector comparison set; ROE of 15.54% has exceeded 15% in only 2 of the tracked years, indicating inconsistent capital efficiency.
- ✗Reported debt-to-equity of 97.64 is exceptionally high in absolute terms; while this partly reflects the financial services subsidiaries within the conglomerate, the aggregate leverage ratio is a material structural variable that is not directly comparable to capital-goods-only peers.
- ✗Q4 FY26 net profit fell 3% YoY, extending a pattern of earnings underperformance relative to revenue growth; the market will focus on FY27 guidance for evidence of margin recovery.
- ·L&T reported Q4 FY26 net profit of Rs 5,326 crore, a 3% YoY decline, while declaring a Rs 38/share dividend; the result prompted coverage noting analyst expectations of resilience despite the West Asia macroeconomic uncertainty affecting international order pipelines.
- ·L&T secured a large-category order for a coal gasification project, reinforcing its domestic energy infrastructure order book; the company also announced divestiture of its entire stake in L&T Metro Rail (Hyderabad) for Rs 1,461.47 crore, signalling active portfolio pruning.
- ·Mean analyst rating of 1.66 across 30 analysts (1-5 scale, lower = more constructive) reflects a concentrated constructive view on the stock as of the run date, though Q4 earnings and the multi-year earnings growth trajectory represent the key variables analysts are monitoring for FY27 guidance.
- ?Does the 5-year revenue-profit divergence reflect a structural shift in LT's contract mix toward lower-margin segments, or is it driven by losses within specific subsidiaries that are being restructured?
- ?How much of the reported debt-to-equity ratio of 97.64 is attributable to the financial services arm, and what does the leverage profile look like for the core engineering and infrastructure business in isolation?
- ?Given that the forward PE implies a 37% earnings recovery from the trailing figure, what assumptions underpin analyst FY27 projections — order book conversion rates, margin normalization, or West Asia exposure resolution?
- ?Is the divestiture of L&T Metro Rail (Hyderabad) part of a broader capital-allocation strategy to concentrate resources in higher-return segments, and how has management characterized the reinvestment plan for the Rs 1,461 crore proceeds?
PE
34.0
Forward PE
21.7
ROE
+15.5%
Profit margin
+5.5%
D/E
97.64
Dividend yield
+1.0%
Quality score
24/100
ROE 5y above 15%
2/5 yrs
FCF 5y positive
4/5 yrs
For informational purposes only. Not investment advice. VivaTrades is not a SEBI-registered Investment Adviser or Research Analyst. Market data sourced from public feeds; consult a registered adviser before any investment decision.Analysis generated 10 May 2026.