comparison in LNT and RIL

Anonymous's picture

Who's better in short term and Long term ?


 #

Let's look at L&T

Current Market Price : 1438
Market CAP:
84,203
Sales For 2009 : 33,900
Crore
Profit : 3481 Cr
Current Assets : 2500 Cr

Looking at p/e 84203 cr/ 3481 cr ( 24 ). It's reasonably priced. Although globally EPC companies trades at much lower p/e due to low margin business. Considering that company is growing at rate of 20% higher p/e is justified.

L&T is going to be biggest beneficiary of govt spending on infrastructure due to its high execution skill and size.

* Relatively lower commodity prices and any reduction in cement and steel prices will help company's margin. 

* Company is expanding in nuclear power and other ares for diversification of revenue.

* There is some value in other business like L&T IT and Finance business.

Based on on all these factors L&T is attractive investment for next 5 years . It is also
immune to any monsoon dependent sluggishness.

A good entry point should be in range of 1150-1300 Rs.  Technically stock is ready for a correction.

 

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