Long term Bet Larsen & Tubro Ltd.

>> Saturday, February 7, 2009

Scrip: - Larsen & Tubro (LNT)
BSE Code: - 500510
CMP: - 638.70
52 Week H/L: - 1937.00 - 611.00
Target for long term investors : - 100% return. (Time frame 15 - 18 months)

Summary: -
One of the badly beaten out scrip in the Indian markets is LNT.
Larsen & Toubro Limited operates in four segments. The Engineering & Construction segment comprise execution of engineering and construction projects to provide solutions in civil, mechanical, electrical and instrumentation engineering to core sectors/infrastructure industries, shipbuilding and supply of complex plant and equipment to core sectors. The Electrical & Electronics segment comprises manufacture and sale of low-voltage switchgear and control gear, custom-built switchboards, petroleum dispensing pumps and systems, electronic energy meters/protection (relays) systems, control and automation products and medical equipment. The Machinery & Industrial Products segment comprises manufacture and sale of industrial machinery & equipment, marketing of industrial valves, construction equipment and welding/industrial products. Others include ready-mix concrete, property development activity, and engineering services and embedded systems.

Stake in Satyam -
Recently LNT hiked its stake in Satyam from 4% to 12%.
Satyam has won few new coustomers. The new management of Satyam Computers can change the phase of Satyam Computers which will directly benefit LNT.

A long term bet: -
It is India’s largest Engineering and Construction giant.
L&T is the best managed company in India – Business Today survey.
Larsen and Toubro will benefit from huge infrastructure investments in India and Gulf regions.
Strong Order book.
L&T will be demerged into Power, IT, Ship building and Railway units along with engineering division. Investors will get very good returns after the demerger.

LNT is reported to recrute 10,000 people in 3 yrs. This is because of its expansion.

Ratings -
Short term: - 5/10
Medium Term: - 7/10
Long term: - 10/10

Company has good financial. Good management also.
A safe bet for long term investors.

Happy Investing.
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