Indian Stock Market News and Analysis

Larsen & Toubro (LNT) is the country`s largest engineering and construction company.
Apart from a strong domestic market player, L&T has an international presence. The international business over the last few years has seen overseas earnings going up 18% of its total revenues. It is developing more markets for its construction services in the India Ocean rim countries, Africa and Latin America. The company is among top five fabrication companies in the world.

The company is planning to enter nuclear energy sector and aims to become a big player in this sector. It is an established player in the nuclear power sector and provides engineering, pro-curement and construction services for nuclear power plants.

The net revenues rose to Rs 45,052.10 million for the Q1FY08 with the growth rate of 30% in comparison WITH net revenues of Rs 34,769 million in Q1FY07. The net profit gone up sharply to Rs 3,768.50 million in Q1FY08 versus the net profit of Rs 1,571.30 million in Q1FY07 with the growth rate of 140%.

Since last four year, the company is showing upward trend in return on net worth (RoNW) and return on capital employed (RoCE). The RONW stood at 15.50%, 17.20%, 22.20% and 24.90% for the year ended FY04, FY05, FY06 and FY07 respectively whereas ROCE stood at 22.00%, 27.60%, 30.70% and 34.80% for the above year ended respectively.

The stock is currently trading at 45.75 times to its earnings and 12.38 times to its book value and is having lots of upside potential in medium to long-term.