NSE Symbol: LTTS | BSE Code: 540115
L&T Share Price Performance
Larsen & Toubro Stock Trends - 2018
Larsen and Toubro (L&T) share price opened at Rs.1264 on 1st January 2018. The stock increased in value to reach Rs.1416 at the end of the month. This sharp increase was mainly because the firm had bagged contracts from Hindustan Petroleum Corporation Ltd., Reliance Industries Ltd. and ONGC. Moreover, an excellent performance in the third quarter of the previous financial year also helped the stock price surge.
Throughout the January and February, L&T continued to get many high-profile orders, but the stock value fell to Rs.1313 due to worldwide market turbulence.
In March, the price of the stock at the beginning was Rs.1,319. The scrip changed marginally throughout the month and stood at Rs.1,301 towards the end.
The L&T share price picked up the pace again in April and went up to Rs.1385.
The stock had a magnificent start in May, with the share price standing at Rs.1420 in the initial few days. However, the stock price fell drastically and reached Rs.1370 by the end of the month.
The stock dropped further by 140 points in June and stood at Rs.1235.
In July, the share price gained strength again. It slightly increased and went up to Rs.1299.
The beginning of August witnessed the stocks going stable but it picked up the pace and reached Rs.1348 towards the end of the month.
Larsen & Toubro Stock Trends - 2016 and 2017
L&T stock price was close to Rs.850 in the beginning of 2016. The scrip slipped in the initial days of January, although the firm bagged several major contracts. By early February, irrespective of the positive developments, the stock price had dropped to around Rs.740.
The shares were traded at roughly that amount for most of February. A long-term pact with McDermott International followed by another massive order led to the stock prices rising by the end of March.
In April, the shares went steadily above Rs.800. During this period, the firm received several high-profile orders which resulted in a steady increase in the stock price. It reached Rs.850 in May but dropped slightly before dramatically rising to Rs.980 in June. When L&T was chosen as the main contractor for the FIFA World Cup, the share prices swore above Rs.1000.
In July, the contract with Mumbai Metro led to a further hike in the share prices and L&T shares traded at Rs.1030. It remained steady for a few weeks before slipping back to Rs.900 domain again in August. Throughout September, the L&T share price remained above Rs.950. The company also announced a dividend of 912.5% in mid-August.
The stock price of L&T stayed well above Rs.970 in October. However, things took a turn in early November when the demonetization his the Indian market and the share prices took a dive. The share prices remained close to rs.900 in December and closed the quarter at Rs.899.
January 2017 started off with L&T share price at Rs.904 which crossed Rs.960 by the end of the month. The scrip didn’t fluctuate significantly in February and it inched cautiously towards Rs.1000 by mid-March. This was mostly because L&T had bagged a couple of major projects during the period.
A major residential order caused a sharp spike and the prices went up to Rs.1120 in April. It remained steady in may, but dropped slightly in June, owing to a weak SENSEX performance.
However, the stock price steadily recovered in July when the bonus in 2:1 ratio was announced. This announcement, coupled with some other developments, pushed the stock price up once again to Rs.1193 in the end of July. August, again, witnessed a sharp drop in the share price owing to global trends, L&T disinvestment and weak SENSEX cues. By the end of August, the stock was hovering around Rs.1,140. September was a month of major fluctuation. While the stock shot up to a splendid level of Rs.1250, it soon dropped to around Rs.1130.
October was a steady month when the Larsen and Toubro share price remained around Rs.1130. However, as the firm bagged a few more orders, the stocks improved and went above the Rs.1200 mark. it remained so for November and December and closed the year at Rs.1258.
L&T Company Information and Brief History
Larsen & Toubro Ltd. is an Indian, multinational engineering firm. It is often referred to as L&T. The company is based in Mumbai but has a global presence. Its primary operations include infrastructure, power, heavy engineering, hydrocarbon, information technology, financial services, etc. Having been around the block for more than 70 years, it has become a household name synonymous with engineering and development. L&T is committed to developing core sectors of the Indian economy and has employed more than 85,000 people across all its operations. Larsen & Toubro share price fluctuates at every moment and thus it is very important for all potential investors to keenly study the performance of the company’s shares before investing in it.
The company was founded in 1938 by two Danish engineers called Henning Holck Larsen and Soren Kristian Toubro. Back then, the company mainly focused on manufacturing dairy equipment. After World War 2, the company shifted to undertaking jobs and providing services. L&T has expanded into engineering and construction sectors. In 1946 the company became Larsen & Toubro Limited and it set up offices in Kolkata, Chennai and New Delhi after independence. As of early March 2018, L&T has a market cap close to Rs.1,77,690 crore.
Company’s Wealth and Recent Performance
Q1 FY 2018-19
L&T recorded a profit after tax (PAT) of Rs.1215 cr which was an increase of 36% over Rs.893 that was reported in the same period during the previous fiscal year.
L&T recorded a gross revenue of 18% y-o-y and reached Rs.28283 cr. This increase was mainly due to the growth in project and services businesses.
The international revenue of L&T constituted 34% of the company's total revenue and stood at Rs.9669 cr.
In this quarter, L&T got new orders worth Rs.36142 cr, recording a growth of 37%. The growth was influenced by the increase in the company's domestic ordering activity.
International orders of L&T constituted 26% of its total order value and was at Rs.9404 cr. The company received orders mainly from the hydrocarbon, infrastructure and heavy engineering businesses.
The consolidated order book was at Rs.271732 cr and constituted 23% of the company's total order book.
An increase of 16% was noticed in the y-o-y in orders from the infrastructure segment that was worth Rs.19395 cr.
The order book of L&T's power segment stood at Rs.8051 cr in this quarter, while that of the heavy engineering segment was at Rs.4055 cr.
Customer Revenue reached Rs.1341 cr, and reported a growth of 46% over the same quarter in the previous year. This rise was mainly because the company adopted the new accounting norms under IND AS 115.
The PAT of L&T stood at Rs.7370 cr and recorded a growth of 22% on a y-o-y basis.
The gross revenue of the company stood at Rs.119862 cr and recorded an increase of 9%.
The new orders bagged by the company was worth Rs. 152908 cr at the group level. It recorded a rise of 7% over the previous year's value.
The international revenue generated by the company was Rs.39699 cr and constituted 33% of the total revenue generated during the year.
The infrastructure segment recorded fresh orders worth Rs.87277 cr and showed an increase of 11%.
The power segment bagged fresh orders worth Rs.2414 cr and registered a growth of 16% y-o-y.
The electrical and automation segment stood at Rs.5209 cr and recorded an increase of 5% y-o-y.
L&T's financial services segment reported a growth of 18%. In this, customer revenue alone stood at Rs.10064 cr.
The company's order inflow grew by 38% y-o-y in the 3rd quarter. In comparison with the same over the last 3 quarters, an overall increase of order inflow is noticed by 8%.
Similarly, the order book of L&T also had an increase by 5%, taking the total value to Rs.2707 billion on the last day of the year.
The company’s revenue from operations increased by 10% to Rs.287 billion over the same quarter in the previous year.
A notable increase in EBITDA was recorded in the December quarter, which increased by 25% to Rs.31 billion over the EBITDA of the 3rd quarter in the previous FY.
Recurring PAT increased by 48% to Rs.14 billion over the same period's PAT in the last year to Rs.14 billion. The net profit also increased by 53% over the same in the previous year.
L&T has performed very well in the domestic market as well. Its order inflow in the domestic sector increased by over 50%. This increase offset the drop in the numbers in the global sector.
The revenue growth of the company was principally driven by its operations in infrastructure, heavy engineering, hydrocarbons and services sectors. All of these sectors individually recorded a significant increase in net revenue as well as EBITDA margin.
Is Investing in Larsen and Toubro Ltd. a Good Idea?
L&T is a leader in the market when it comes to engineering and infrastructure. It has landed numerous significant projects over the years. A long-term perspective says that India should expand and develop its infrastructure to boost its economy in order to be at par with other developed nations in the world. As the Indian Government is expected to increase its expenses on infrastructure development, major engineering firms, like L&T, are set to benefit from it.
L&T is one of the most reputed engineering firms in India. It is also one of the first professionals to enter the sector and will also be benefited from the upcoming developments. Their profits and revenue have been quite consistent over the years. The company has strong foundations and is expected to remain so in the future.
However, since markets around the world incline to suffer a setback this year due to a proposed rise in the interest rate by the U.S Federal Reserve, the stock price of L&T may go through a slight reduction. However, this could be a favorable entry point for potential investors. It would be ideal to purchase stocks when the L&T share price falls further. However, it is always advisable to conduct thorough research before investing.