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L&T finance is coming with IPO. What will be its implications on L&T share price and future prospects?
Can we buy it at current level Rs 2010 (33x). Present EPS of L&T finance as per balance Sheet on 31st March 2010 is Rs 7.79 (FV 10Rs) and Authorized Share Capital is 2,50,000,000 (held by holding company i.e L& T).
L&T finance is coming with IPO. What will be its implications on L&T share price and future prospects?
Can we buy it at current level Rs 2010 (33x). Present EPS of L&T finance as per balance Sheet on 31st March 2010 is Rs 7.79 (FV 10Rs) and Authorized Share Capital is 2,50,000,000 (held by holding company i.e L& T).
What's the net profit that L&T finance had reported for FY 2010?
Multiply it by 15 and you will get a rough idea about what the company is worth.
(I am assuming there were no significant extra-ordinary expenses or other income in FY 2010).
What are the long term effect on share values of Larsen after split in many companies, All are advising to accumulate in small steps as it will be once again like split of Reliance Group companies and all were benefited by getting multiple company's shares? I buy 23@ 1673, also buying 1-1 share at every fall ?
What are your opinion - ALCHEMIST as well as other experts?
All are advising to accumulate in small steps as it will be once again like split of Reliance Group companies and all were benefited by getting multiple company's shares?
I don't think that is going to happen.
The management has clarified that these nine units won't be separate companies.
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There are also no plans now to spin off them as independent companies and list them, Nayak added.
Even if these nine units are converted to subsidiaries, the shareholders won't be getting any new shares.
Shares of subsidiaries will be owned by L&T and not the shareholders of L&T.
The case of Reliance was totally different. Reliance was split into a number of parts. Shareholders of Reliance were given shares of Reliance Communications etc.
Larsen & Toubro (the company) is going to remain as it is. Its operations are going to split, not the company.
Larsen & Toubro (the company) is going to remain as it is. Its operations are going to split, not the company.
Would you recommend to buy at this level, What future expert foresee for L&T , In this market scenario it seems safe share as not going down too much ( below 1640) , So many advisers on moneycontrol recommend to accumulate L&T , what is the reason behind it?
Would you recommend to buy at this level, What future expert foresee for L&T , In this market scenario it seems safe share as not going down too much ( below 1640) , So many advisers on moneycontrol recommend to accumulate L&T , what is the reason behind it?
Analysts expect FY 2012 consolidated eps to be in the 75-85 range.
At current price of 1645, the stock is trading at 19-22 times forward earnings.
In my opinion, it is still an expensive stock and I would prefer to wait for levels of around 1425 (15% below current market price).
This stock is now even working in tandem with market. On bad days it is falling much more than market. On good days too it is not showing any strength.
Fundamentally I don't see anything that has changed in the last couple of weeks for this stock. May be there is something below the surface which is not seen by us.
I will rather wait at least the time when this stock syncs with the market it general. Can anyone post a chart of this stock please?
Currently it is around your price level. Are you thinking to buy?
I don't feel like buying anything right now. .
If you want to buy, buy in small lots and keep some cash to average. There may be more downside.
The technical chart looks ugly and the stock is about to touch multi-year lows. It may go all the way to 1000.
RBI's interest rate hikes have been very severe and may derail India's investment cycle.
Capital goods companies are totally dependent on investments made by other companies.
The current order-book of L&T is sufficient to keep the company busy for a few quarters, but fresh orders may not come if companies hold back investments.
That I think is the primary reason why L&T's stock is under pressure.
Of course, the company still is one of India's best-run large-sized companies.
Long-term prospects for the company remain good, but next 4 quarters may be very challenging, especially from the order-book perspective.
I still believe that it is not just the fact that they may have problems in meeting their order book guidance. High interest rates have been there for past 12 months and market may have discounted that 6 months back.
What is happening for past one week or so is heavy, sustained and much larger than broader market selling. Even the volumes have been more than average. In just couple of week it is down to present 1370 from almost 1700.
I still believe that it is not just the fact that they may have problems in meeting their order book guidance. High interest rates have been there for past 12 months and market may have discounted that 6 months back.
High rates have been there for a long time, but the rates are taking much longer to come down than what people expected earlier.
If rates remain high for 3-6 months, the economy can easily absorb the shock, but if rates are kept high for an extended period, the economy can slow down substantially.
Inflation is proving to be very sticky and now many analysts have began to feel that inflation won't come down unless economic growth is slowed.
Well, in that case all the peers of L&T should have been going down to the more or less same extent. However if we compare BHEL, Reliance Infra, GVK, JAYPEE, ABB, Siemens, etc; these companies are not following L&T.
Even the CNX Infra index has not dropped even 5% in this entire month.
L&T, something is definitely cooking. May be the results will shed some light
Well, in that case all the peers of L&T should have been going down to the more or less same extent. However if we compare BHEL, Reliance Infra, GVK, JAYPEE, ABB, Siemens, etc; these companies are not following L&T.
Even the CNX Infra index has not dropped even 5% in this entire month.
L&T, something is definitely cooking. May be the results will shed some light
I guess you missing the point is the rise from split or bonus.
If i recall correctly a 2-3 year (i guess just before recession) the stock value halved because of split or bonus.
And it went from from 1400 to 700.Than recession hit and i rembered clearly it was also available for 450-500.
(Siemens have different story more related to delisting offer of around 900.ELse i rembered clearly it was harbouring around 275-300.ANd because of an idiot analyst on tv i sold the stock at 320.Else i was ready to sleep with the stock life long.)
From there it went almost upto 1800.Four times .I dont think other shares you mentioned showed the same color.Since the market was looking good its order book was enough to show more power in price.
Now personally i want this stock in my portfolio(atleast 1 stock).But not ready to pay more than 1200 averaged price.
I think environment is getting right to invest for long term in fundamentally strong companies.
But if one really need to see 10 times growth in 10-15 years horizon one should also look at pipavav.
IT did went but not because of some finance reason but split in ration 1 share for 2 share holding.
CHeck here last 5 year chart.On oct 1 it split and in some days it was around 500 something.I guess its 585.I thought 485.
Well, in that case all the peers of L&T should have been going down to the more or less same extent. However if we compare BHEL, Reliance Infra, GVK, JAYPEE, ABB, Siemens, etc; these companies are not following L&T.
Pure infrastructure stocks have already been battered.
Most of them have lost more than 50% from their highs including Reliance Infrastructure, GVK, Jaypee Infratech etc.
Capital goods stocks were outperforming other infrastructure stocks till a few days back, but now these stocks are under pressure too.
ABB has lost as much as L&T in last few days.
BHEL had already been beaten down because of FPO fears and thus is now relatively stable.
Siemens is stronger, but is close to 200 EMA and may also breakdown in markets remain weak.
Thermax is cracking too now and lost 5% yesterday.
Actually many of the strongest stocks in the market are now breaking down like Coal India, Jubilant Foodworks, Lovable Lingerie etc. These stocks were (some still are) richly valued and over-owned. L&T was (maybe still is) a similar case.
Long-term prospects for the company remain good, but next 4 quarters may be very challenging, especially from the order-book perspective.
Just as was feared by many, Larsen & Toubro's order book is stagnating.
L&T announced results today. Initially the stock reacted positively, but once the order book numbers came, the stock collapsed.
Quote:
Earlier in the day, L&T posted a 4.3 per cent rise in the quarterly net profit to Rs 798 crore, beating street estimates. Cut in order inflow guidance and margin outlook for FY12 will weigh on the stock for a while and the guidance has been cut due to loss of big ticket orders in power and metal, said an analyst tracking the company.
L&T is a funny stock to me. It has orders worth turnover of 3 years already in its pocket and new orders will keep coming (even at a reduced rate). Many of its businesses are not dependent on these orders like Machinery and Industrial Equipments, Electrical Business, Infotech and even L&T Finance.
It's construction division (which account for most turnover) can keep itself busy for 3 years if they stop bidding for new orders so what is all the fuss about?
I will probably get worried if I see a order book slowdown to an extent where earnings visibility beyond 18 months is in doubt.
Sometimes I totally fail to understand and synchronize my thinking with market.
It's construction division (which account for most turnover) can keep itself busy for 3 years if they stop bidding for new orders so what is all the fuss about?
Market's reaction to a quarterly results announcement doesn't depend on how good or bad the results are.
Market's reaction depends on whether the results meet or fails to meet expectations of the market.
For a long time, L&T had been enjoyed a premium valuation because of its strong growth potential.
No doubt, the company still has the ability to maintain its revenues and profits for the next 2-3 years.
However, the company's ability to show strong growth is now being questioned.
That's the reason why the stock has corrected so sharply in the last 6 weeks or so. The growth premium is now gone (almost).
L&T isn't an isolated case.
The entire Indian market is currently trading at a significant premium because of its growth potential. If the growth momentum is derailed, Indian markets can underperform other markets for a few quarters or maybe longer.
Just to give an example:
Microsoft is now trading at a PE of less than 10. Infosys is trading at a PE of 23.
What is happening to my favorite stocks Reliance, Infosys, L&T Can't complain much though as have made some good money on them in past.
No comments from anyone on results? I also get the feeling that 15-20% growth target in order booking is really ambitious. Last year too there was a mid course correction and guidance downgrade. One thinks, they should have learnt the lesson.
990, however, should be a good level to enter if you are ready to stay in it.
What is happening to my favorite stocks Reliance, Infosys, L&T Can't complain much though as have made some good money on them in past.
No comments from anyone on results? I also get the feeling that 15-20% growth target in order booking is really ambitious. Last year too there was a mid course correction and guidance downgrade. One thinks, they should have learnt the lesson.
990, however, should be a good level to enter if you are ready to stay in it.
I remember in 2008, post-bonus, the stock went in downtrend. And I was like placing a orders at much lower level to get stock. Then all of a sudden stock made 150% return from there.
I hope it touches the 900 level so that can improve my long term portfolio as BHEL is not getting any support and I feel the government will further erode its capital. So better would be to shift to L&T.
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Can't complain much though as have made some good money on them in past.
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