L&T

Larsen & Toubro Limited, also known as L&T, is an

Indian multinational conglomerate headquartered
in Mumbai, Maharashtra, India. It was founded by Danish
engineers taking refuge in India, as well as an Indian
financing partner. The company has business interests in
engineering, construction, manufacturing goods,
information technology, and financial services, and also
has an office in the Middle East and other parts of
Asia.L&T is India's largest engineering and construction
company. Described by NDTV in 2013 as a "bellwether of
India's engineering & construction sector, L&T was
recognized as the Company of the Year in Economic Times
2010 awards

Beta Estimation
It is the ratio of covariance between market return and the
securitys return to the market return variance.
The beta ( or beta coefficient) of an investment indicates
whether the investment is more or less volatile than the
market. In general, a beta less than 1 indicates that the
investment is less volatile than the market, while a beta
more than 1 indicates that the investment is more volatile
than the market.A beta greater than one generally means
that the asset both is volatile and tends to move up and
down with the market.
The degree to which different portfolios are affected by
these systematic risks as compared to the effect on the
market as a whole, is different and is measured by Beta.
To put it differently, the systematic risks of various
securities differ due to their relationships with the market.

Name
Company

of Average
Market
Return

L&T

Beta

0.046249386 1.115908285

CAPM

0.045814659

RATIO ANALYSIS
We
have
ascertained
those
different
budgetary
proportions to every last one of five organizations to 3
quite some time in place should get an similar see of the
proportions. The sorts from claiming proportions
ascertained need aid.:

Liquidity Ratios
Leverage Ratios
Turnover Ratios
Profitability Ratios
Valuation Ratios.

Current Ratio
Acid Test Ratio
Cash Ratio

Liquidity Ratios
2.034719 2.354840 1.783999
862
02
528
2.026256 2.344510 1.774698
647
089
21
0.087203 0.083639 0.068809
161
264
873

Leverage Ratio
Debt Equity Ratio
Interest Coverage Ratio

104.4795 101.4992 75.83235

784
086
576
3.521089 3.382022 4.645750

Better Interest coverage Ratio

Debt Service Coverage Ratio

409
257
399
4.441032 3.842263 5.427160
441
421
6
4.441032 3.842263 5.427160
441
421
6

Turnover Ratios
Inventory Turnover Ratio
Debtors Turnover Ratio
Average Collection Period
Fixed Asset Turnover Ratio
Total Asset Turnover Ratio

151.8261
165
50.84496
92
7.178684
652
104.7697
231
0.717892
118

153.4646
111
59.84459
624
6.099130
463
90.78716
393
0.703398
363

138.4897
469
55.39333
678
6.589240
173
80.09331
929
0.817039
806

0.078114
807
0.053624
287
0.038496
453
6.265786
132
0.078321
564
0.078321
564

0.087902
275
0.057026
68
0.040112
473
6.147462
928
0.087787
385
0.087787
385

0.102525
168
0.070329
673
0.057462
143
7.265166
327
0.106743
797
0.106743
797

Profitability Ratios
Gross Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Earning Power
Du-pont Analysis
Valuation Ratios
Price Earning Ratio
Yield Ratio
Market to Book Value Ratio

541.4946 360.8678 112.7843

223
735
171
0.520649 0.968335 0.914976
048
037
881
0.653300 0.464784 0.174625
6
576
834

Liquidity Ratios
1. Current ratio = Current assets/Current liabilities
A ratio less than 1 indicates that the firms liabilities
are greater than its assets and its likely that the
company would be unable to pay off its obligations.
While a current ratio above 1 shows that the company
is not in good financial health, it does not necessarily
mean that it will go bankrupt.
Those present proportion may be most astounding
for those quite a while 2014. It infers that L&T required
most noteworthy fleeting dissolvability on 2014 Also it
would do well to ability about financing its present
liabilities Throughout that quite a while.
2. Quick Ratio (Acid test ratio) = Quick assets / Current
liabilities
Quick assets = Current assets Inventories
The acid test ratio or quick ratio measures the liquidity of
a company by identifying its capability to meet its current
liabilities by utilizing its quick assets. As the quick ratio
eliminates the inventories, it is a more stringent measure
of liquidity compared to the current ratio. If a firm has
sufficient quick assets to pay off its entire current
liabilities, it will be able to meet its obligations without the
need of selling off any of its long-term or fixed assets. A
higher quick ratio is usually more favourable as it signifies
that the company has high financial security in the short
term.

Over 2014, L&T required those most elevated capability

will pay off its present liabilities Eventually Tom's perusing
utilizing its fast benefits.

Leverage Ratios
1. Debt Equity Ratio = Debt/Equity.
Lower the debt equity ratio, higher is the degree of
protection enjoyed by the creditors.
the debt equity ratio is lowest for year 2013 and is
highest for year 2015. This implies year 2013 was more
secure and 2015 was least secure
2. Interest Coverage ratio
=Profit before interest and taxes/gross interest
A higher ratio depicts that firm can easily meet
interest burden even if profits decline.
Interest coverage is maximum for year 2013.

Turnover Ratios
1. Total Asset Turnover Ratio:

Net Sales
---------------------------------

Average Total Assets

In 2013, the ratio of asset over sales is the maximum with
not much change in the previous and next year, providing
consistency in the utilization of assets per sales made.

Profitability Ratio
Gross Margin
1. Gross Profit Margin Ratio =
----------------------------------------Net Sales

2013 shows a more profitable ratio than the other two,

this implies a better sales margin.
Net Income
2. Net Profit Margin Ratio =
----------------------------------Net Sales
The ratio analysis shows a good conversion of income
from the sales made in 2013 but it is falling in 2014 and
again in2015.
3.Return On Assets (ROA) Ratio

Annual Net Income

ROA =

Average Total Assets

For L & T year 2013 earned maximum profit.

4.Return On Equity (ROE) Ratio
Return on equity is an important measure of the
profitability of a company. Higher values are
generally favourable meaning that the company is
efficient in generating income on new investment.
ROE =
Equity

Annual Net Income/Average Stockholders'

For L & T ROE is marginally same for the year 2015

and 2014 and for 2013 it is most profitable.

Valuation Ratios
Price/Earnings (P/E) Ratio
Price/Earnings or P/E ratio is the ratio of a company's
share price to its earnings per share. It tells whether

the share price of a company is fairly valued,

undervalued or overvalued.
P/E Ratio = Current Share Price/Earnings per Share
For financial analysis justified P/E ratio is calculated
using dividend discount method.
P/E Ratio = Expected Payout Ratio/(Required Rate of
Return Dividend Growth Rate)
If the justified P/E calculated using dividend discount
analysis is higher than the current P/E ratio the share
is undervalued and should be purchased. If the
justified P/E is lower than P/E ratio the share is
overvalued and should be sold.
In the year 2013 and 2014 P/E ratio was almost same
and for the year 2015 it has increased a bit i.e they
fairly valued share prices in that year.