Larsen And Toubro
Larsen and Toubro (L&T) is a major technology, engineering, construction, manufacturing and financial services conglomerate, with global operations. L&T addresses critical needs in key sectors – Hydrocarbon, Infrastructure, Power, Process Industries, and Defense – for customers in over 30 countries around the world.
On 5th March 2015 stock price made high of Rs.1893 and after one year stock is available at 40% discount. From past three years, profit is gradually declining and net profit margin ratio is reflecting business inefficiencies. Profitability from overall operations i.e Return On Capital Employed (ROCE )is matching bank Fixed Deposit returns. This is not the good sign from the shareholder’s point of view.
Over the last 5 years company is able to maintain sufficient cash to meet its short term obligations. Long term debt to equity ratio is indicating vulnerability during an economic slowdown. The company is maintaining healthy dividend pay out and at Current Market Price (CMP) Dividend yield from this stock is about 1.4%.
Technicals of Larsen And Toubro
After making low of 1016.05 stock found renewed buying interest from investing community and clocked nearly 13% returns in a week. At present in large cap domain, suitable Bottom fishing can provide very good opportunities with favorable risk to reward ratio and L&T can be closely watched.
Short term trend line breakout with considerable volume can take Stock towards 1220-60, where as Strong long term support zone exists at 960 levels and fall below this can give more lucrative opportunity at 755-830 Levels.
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Disclaimer: I do not hold any position in LT.