On this page ▾
We do not publish one number for Larsen & Toubro — and here is why.
Larsen & Toubro is really several different businesses under one roof, and they do not work the same way. Adding them together into a single “fair value” would produce a figure that describes none of them. So we value each part on its own terms instead of printing one number that looks tidy and means little.
- How it is valued: business by business, with no single blended figure.
- What the price assumes: 6% growth, against 16% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Larsen & Toubro's revenue went from ₹1,19,862 crore to ₹2,85,874 crore — it compounded at about 11% a year over 8 years.
- Biggest swing factor: Order inflow and backlog. Main risk: A slowdown in public capex.
01Engineer, 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.
Around that core sit listed subsidiaries with completely different economics: LTIMindtree and L&T Technology Services in IT services, and L&T Finance in lending. Construction earns thin margins on large revenue, IT earns high margins on little capital, and lending earns a spread — which is why the engine values them separately.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Larsen & Toubro, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Larsen & Toubro's record, in plain numbers
Between FY2018 and FY2026, Larsen & Toubro's revenue went from ₹1,19,862 crore to ₹2,85,874 crore — it compounded at about 11% a year over 8 years. Net profit grew from ₹8,004 crore to ₹18,954 crore, about 11% a year — roughly in step with revenue. In FY2026 it kept 6.6% of revenue as net profit — against a low of 5.9% in FY2025 and a high of 9.5% in FY2021. The latest year added 11.8% to revenue, close to its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 1,19,862 | 8,004 | 6.7% |
| FY2019 | 1,41,007 | 10,217 | 7.2% |
| FY2020 | 1,45,452 | 10,894 | 7.5% |
| FY2021 | 1,35,979 | 12,921 | 9.5% |
| FY2022 | 1,56,521 | 10,419 | 6.7% |
| FY2023 | 1,83,341 | 12,531 | 6.8% |
| FY2024 | 2,21,113 | 15,547 | 7.0% |
| FY2025 | 2,55,734 | 15,037 | 5.9% |
| FY2026 | 2,85,874 | 18,954 | 6.6% |
04How Larsen & Toubro gets valued — and why
Estimate withheld — the engine says so itselfThis is a group of businesses with different economics. A single discounted cash flow across all of them averages them into something that describes none of them, so our engine withholds a single blended fair value rather than publishing a number it cannot defend. The parts are valued separately instead.
05What decides Larsen & Toubro's value
Order inflow and backlog
Most 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 margins
Construction margins are thin, so cost overruns or commodity swings move profit by much more than they move revenue.
Middle East orders
A large share of recent orders has come from Gulf oil and gas projects, which follow the region's own capex cycle.
Listed stakes
The IT and finance subsidiaries are listed, so part of L&T's value is marked to market every trading day.
06What could go wrong
- A slowdown in public capex. Government infrastructure spending is the biggest single source of domestic orders.
- Working capital. Delayed client payments tie up cash and can strain the balance sheet.
- The conglomerate discount. Investors may keep valuing the group below the sum of its parts.
07What the full L&T valuation shows
Sign in free to see the complete Larsen & Toubro valuation
- ✓Segment-by-segment workings — Infrastructure, Energy, Hi-Tech Manufacturing, IT services and Financial Services, each on its own lens
- ✓What each business contributes — so you can see where L&T's value actually sits
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against Siemens, ABB, BHEL and Hindustan Aeronautics
- ✓Downloadable report — the full write-up, yours to keep
08Compare Larsen & Toubro with peers
The same valuation, run side by side.
Larsen & Toubro vs Siemens IndiaBoth industrial, one project-led and one product-led.→Larsen & Toubro vs ABB IndiaAutomation and electrification against engineering and construction.→Larsen & Toubro vs BHELThe public-sector heavy-engineering comparison.→Larsen & Toubro vs Adani PortsBoth build and operate long-life infrastructure, funded on very different terms.→Larsen & Toubro vs Reliance IndustriesTwo of the heaviest capital spenders in the index, judged on what that spending earns back.→Larsen & Toubro vs Hindustan AeronauticsEngineering and construction against defence manufacturing — both won on order books.→09Questions people ask about Larsen & Toubro
Why is L&T valued by its parts?
Because construction, IT services and lending earn very different returns on very different amounts of capital. One discounted cash flow across all of them would describe none of them, so each reported segment is valued on the lens that fits it.
How much do LTIMindtree and L&T Finance add to L&T's value?
Their contribution is set out in the segment workings of the full valuation. Because both are listed, the market also gives a daily cross-check on what L&T's stakes are worth.
Is L&T's order book a reliable guide to earnings?
It is the best single guide to revenue over the next two to three years, but not to profit: margins on those orders depend on execution, input costs and payment terms.
Is Larsen & Toubro overvalued?
At ₹4,144 the market is pricing in roughly 6% sustained growth, against the ~16% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Larsen & Toubro?
This business is a group of operations with different economics, so a single blended figure would describe none of them. The parts are valued separately and the breakdown is in the report, rather than one number that cannot be defended.
How much debt does Larsen & Toubro carry?
Debt to equity stands at 0.58, down from 0.66 at the start of the period — the balance sheet is a core input to the cost of capital used here.