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Today's prices ask more of BHEL than of Larsen & Toubro.
At current prices, buyers of BHEL are assuming about 35% growth against 14% in its own record; for Larsen & Toubro it is 6% against 16%. That shows which share needs more to go right — not which is cheaper. How far each trades from its estimated fair value is in the full valuations.
- Valuation method: BHEL on estimate withheld; Larsen & Toubro on estimate withheld.
- Size: Larsen & Toubro is worth about 3.8 times BHEL on the stock market.
- Record: Larsen & Toubro has grown revenue faster: BHEL compounded at about 2% a year (FY2018–FY2026) and Larsen & Toubro at about 11% (FY2018–FY2026).
- What to watch: thermal orders at BHEL; order inflow and backlog at Larsen & Toubro.
| BHEL | Larsen & Toubro | |
|---|---|---|
| Price | ₹436 | ₹4,144 |
| Market cap | ₹1.52L Cr | ₹5.70L Cr |
| P/E | 52.8 | 31.9 |
| P/B | 5.81 | 5.22 |
| Fair value 🔒 sign in | ₹0,000 | ₹0,000 |
| Upside 🔒 sign in | +00% | +00% |
| Valued on | Estimate withheld | Estimate withheld |
01Two businesses
India's power-equipment maker
Bharat Heavy Electricals (BHEL), majority-owned by the Government of India, designs and builds boilers, turbines and generators for thermal, hydro and nuclear power stations, as well as equipment for railways, defence and industry.
Engineer, builder, IT house and lender
Larsen & Toubro is India's largest engineering and construction company. Its core business wins and delivers large projects — roads, metros, airports, water systems, power transmission, and oil and gas facilities in India and the Middle East. Its hi-tech manufacturing arm makes heavy equipment and defence systems.
02The records side by side
Larsen & Toubro has grown revenue faster: BHEL compounded at about 2% a year (FY2018–FY2026) and Larsen & Toubro at about 11% (FY2018–FY2026). By revenue, Larsen & Toubro is about 8.5 times the size of BHEL. BHEL kept 4.7% of revenue as net profit in FY2026; Larsen & Toubro kept 6.6% of revenue as net profit in FY2026. BHEL reported a net loss in FY2020 and FY2021; Larsen & Toubro was profitable in every year shown.
Full ten-year tables and charts are on each company's page: BHEL · Larsen & Toubro.
03What each price assumes
Work backwards from each share price and you can see what buyers are taking for granted — the rate each company must sustain to justify what it costs, against what its own record supports.
04What decides each one's value
- Thermal ordersNew coal-plant contracts fill the order book.
- ExecutionDelivering on time converts orders into profit.
- Order inflow and backlogMost of L&T's revenue for the next few years is already in its order book. The size and margin of new orders set future earnings.
- Execution marginsConstruction margins are thin, so cost overruns or commodity swings move profit by much more than they move revenue.
05What could go wrong
- Execution delaysLarge projects often slip.
- Working capitalSlow payments tie up cash.
- A slowdown in public capexGovernment infrastructure spending is the biggest single source of domestic orders.
- Working capitalDelayed client payments tie up cash and can strain the balance sheet.
06Which is better value?
Sign in free to see which trades further below its worth
- ✓Both fair values per share — each on the method that fits the business
- ✓Every step of both workings — growth, margins and cost of capital, with sources
- ✓Bull, base and bear cases — for each company
- ✓Downloadable reports — the full write-up for each, yours to keep
08Questions people ask
Is BHEL or Larsen & Toubro better value?
That turns on how far each share trades from its estimated fair value. Both figures, with every step of the working, are in the full valuations, free to view once you sign in. On the public numbers, BHEL trades at 52.8 times earnings and 5.81 times book value, and Larsen & Toubro at 31.9 times earnings and 5.22 times book value — but multiples alone mislead when two businesses work differently, which is why each is valued on the method that fits it.
What is the difference between BHEL and Larsen & Toubro?
Bharat Heavy Electricals (BHEL), majority-owned by the Government of India, designs and builds boilers, turbines and generators for thermal, hydro and nuclear power stations, as well as equipment for railways, defence and industry. Larsen & Toubro is India's largest engineering and construction company.
Are BHEL and Larsen & Toubro valued the same way?
No. BHEL is valued on estimate withheld and Larsen & Toubro on estimate withheld, because forcing one model onto both would misstate at least one of them.
What does today's price assume for BHEL and Larsen & Toubro?
Worked backwards from the share price, BHEL needs about 35% growth and Larsen & Toubro about 6% growth, against 14% and 16% in their own records.