Larsen and Toubro Limited so far has disappointed shareholders. Almost every frontline stock has participated in the rally except L&T and is turning out to be a laggard. A decline in Quarterly Net Profit (YoY) along with declining Net Cash Flow and a major fall in TTM Net Profit and is testing investor patience. With a market cap of 132,122.69, book value of 371.62, and a dividend yield of 1.91% the company is fundamentally well placed. Valuation wise the share is trading at a P/E of 19.22 while the sector P/E stands at 19.83 which states it is still undervalued.
Technically the share is trading close to its 100 days moving average of 954.07, In today’s trading session, it opened at Rs. 944.95, went to a high of Rs. 964.60(above its 100DMA) but could not sustain at those levels and closed the day at Rs, 939.85. Unfortunately, Nifty saw some profit booking at higher levels which also reflected in the share price. With increasing revenue every quarter for the past 3 quarters, Zero Promoter Pledge Annual Net Profits improving for the last 2 years, and brokers upgrading recommendation or target price in the past three months, it will be a wealth creator as it is stock which is a direct reflection of the economy. With economic activities picking up and green shoots visible it is a must buy with a long term view.