Skip to main content

Stock Watch - LARSEN & TOUBRO (L&T)

larsen&tubro L&TLarsen & Toubro Limited (L&T) is India's largest engineering and construction conglomerate with additional presence in electronics and IT. A strong customer-focus approach has enabled L&T to attain and sustain leadership position over last 50 years. L&T enjoys a premiere brand image in India and its international presence is on the upswing, with a global spread of over 30 offices worldwide.

Recently L&T has increased its stake in IT company Satyam Computers from 4% to 15%. Will it have any major impact on its balance sheet? We have to wait and watch, till there is some clarity on the operations of Satyam Computers.

Now let us take a look at the fundamentals of the L&T's stock.

..Order backlog up 48% to Rs.609 bn, equivalent to 30 months of FY08 sales.
..Best placed in emerging opportunities like Defence, Railways and Shipping.
..Downside risk to margins has diminished in view of softening in metal prices.
..Ability to tap opportunities in Middle East if domestic market slows down.

Key Risks
..Credit crunch and firming interest rates likely to decelerate infrastructure investment.
..Bad debts may increase as firming of interest rates and credit crunch impact project developers.
..Impact of its stake in Satyam.

At CMP of Rs.630, the stock trades at 13 times FY09 earnings estimate of Rs.49.Medium to Long term investors can Buy/Accumulate on declines, to get good returns.

Popular posts from this blog

What is Gold ETF - Gold Bees, Reliance Gold,Kotak Gold

What is Gold Bees or Gold ETF?

Gold ETFs are open-ended mutual fund schemes that will invest the money collected from investors in standard gold bullion (0.995 purity). The investors' holding will be denoted in units, which will be listed on a stock exchange.They provide returns that would closely track the returns from physical gold in the spot market.

An investor can buy and redeem the units either directly from the mutual fund or from the stock exchange.Presently there are many Gold ETFs traded in NSE India. Some of the listed Gold ETFs are GoldBees,Reliance Gold,Kotak Gold,UTI Goldshare

Why choose Gold?
Gold holds its own in any investment evaluation on its strengths as a hedge against inflation, value in the event of political uncertainties and its traditionally negative co-relation with other asset classes such as stocks, fixed income securities and commodities.

The value of goods and services that gold can buy has remained stable unlike currencies that have seen significant…


NIFTY BEES - is the first ETF (Exchange Traded Fund) in India, which seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. It gives you the most diversified exposure at lowest possible unit size. Approximately value of Nifty bees will be 1/10th value of the prevailing Nifty price.

ETFs are one of the latest financial innovations and any new concept takes time to be known widely. Globally it took more then five to seven years before it could be of any significant size. In India, it was introduced with Rs 21 crore in size , a fraction of the mutual fund industry, it has come far with more than Rs 700 crore in size with six ETFs.

The Nifty BeES also scores over other index funds due to its low tracking error and expense ratio, apart from easier tradeability as it is listed in the NSE. One can also consider doing an SIP in Nifty BeES.

Some of the reasons to invest in Nifty Bees : Investing in Exchange …

Your Bill Amounts Are Going To Increase From June 1, 2016

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Union Finance Minister, Arun Jaitley, in his budget announcements proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The present rate of service tax will be hiked to 15 per cent from June 1, 2016, from 14.5 per cent. Take a look at what gets expensive:

Phone Bills: Your phone bills are going to go up. So, pay a good 15 per cent now on service tax on phone bills.

Restaurant Bills :If you are dining in a restaurant that already has service tax applicable, you are going to pay more on your eating out. Though 0.5 per cent on a single bill may not mean much, frequent diners may end-up paying a lot during the year.

Travelling: You will have to pay more for air travel, as there is a service tax on tour operators and travel agents.