India’s largest publicly held company, L&T has declared its Q2 (second quarter) results today. The company seen strong growth with Q2 net profit jumping 31% at Rs.765 crore vs Rs.580 crore. Also, its net sales were at Rs 9,261 crore versus Rs 7,918.8 crore last quarter. Its income from other sources (Satyam stake sale) was also up at Rs 382 crore versus Rs 212 crore earlier. Company’s operating margins stood at 10.8% versus 10.6% again a strong figure.
The average 12-month (Earnings per share) EPS was found to be Rs.56.92 per share. L&T’s price-to-earnings (P/E) ratio was 34.50 (highly valued). The latest book value of the company is Rs 301.91 per share. At current market price, the price-to-book ratio of the company was 6.51. Also, the dividend yield of the company was 0.64%.
Our Analysis: This company has huge order book, which tells us its future growth story. But the global order and demand has cool down for this company, we may see this in next quarter result.
At currently market price the stock seem to be over valued. So our preference stay away from this stock.