ABOUT Larsen & Toubro Ltd is a multinational conglomerate that is primarily engaged in providing engineering, procurement, and construction (EPC) solutions in key sectors such as Infrastructure, Hydrocarbon, Power, Process Industries and Defence, Information Technology, and Financial Services in domestic and international markets.
KEY POINTS Ex-Service Business
1. Infrastructure Segment (46% of revenues) It comprises engineering and construction of buildings and factories, transportation infra, heavy civil infra, power transmission & distribution, water & effluent treatment, smart world & comm. projects and metallurgical & material handling systems. This is the core business of the company.
2. Hydrocarbon Segment (12% of revenues) It comprises complete EPC solutions for the global oil & gas industry from design through detailed engineering, fabrication, procurement, project management, construction, installation, and commissioning.
3. Power Segment (3% of revenues) It comprises turnkey solutions for coal-based and gas-based thermal power plants including power generation equipment with associated systems and/ or balance-of-plant packages.
4. Defence Engineering Segment (2% of revenues) This segment comprises the design, development, serial production, and life-support of equipment, systems, and platforms for defense and aerospace sectors; and the design, construction, and repair/ refit of defense vessels. The company has been active in the defense and strategic sector since the mid-80s.
5. Heavy Engineering Segment (2% of revenues) This segment comprises the manufacture and supply of custom-designed, engineered critical equipment and systems for core sector industries like fertilizer, refinery, petrochemical, chemical, oil & gas & thermal & nuclear power. The company is amongst the top 3 players globally in the sector.
6. Others (4% of revenues) The other businesses include realty, manufacture, sale, marketing of industrial valves, construction equipment, rubber processing, etc. It also has a presence in the mining and aviation sectors.
Geographical Revenue Breakup In FY22, Domestic sales accounted for ~64% of revenues, followed by the USA & Europe (~18%), the Middle East (~11%), and the Rest of the world (~7%).
Order Book In FY222, the Infrastructure segment accounts for ~73% of an order book, followed by hydrocarbon (~16%), Power (~2%), Defence engineering (~4%), heavy engineering (1%), and others (4%). Domestic orders account for ~73% of an order book, followed by the Middle East (~20%) and others (~7%). Note: The order book does not include services business verticals due to the nature of those businesses.
TECHNICAL ANALYSIS. Time Frame - 1D. 1. New long in FUT. 2. Average traded volume. 3. Stock making new highs. 4. In 52 Weeks high zone.
FUNDAMENTAL ANALYSIS. Sector: Infrastructure Developers & Operators 1. Market Cap - ₹ 308,725 Cr. 2. Stock P/E - 32.1 3. Price to book value - 3.77 4. Debt to equity - 1.58 5. Free Cash Flow - ₹ 16,124 Cr.
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