Is Larsen & Toubro overvalued or undervalued?

Jun 09 2025 03:44 PM IST
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As of June 4, 2025, Larsen & Toubro is considered undervalued with an attractive valuation grade, featuring a PE Ratio of 34.21 and strong financial metrics compared to peers like Siemens and CG Power & Industries, despite underperforming the Sensex in the past year but achieving a 130.74% return over three years.
As of 4 June 2025, the valuation grade for Larsen & Toubro has moved from fair to attractive, indicating a positive shift in its perceived value. The company is currently considered undervalued, given its strong financial metrics in comparison to its peers. Key ratios include a PE Ratio of 34.21, an EV to EBITDA of 17.35, and a ROCE of 17.48%.

In comparison to peers, Siemens has a significantly higher PE Ratio of 56.88 and an EV to EBITDA of 52.96, while CG Power & Industries is even more expensive with a PE Ratio of 107.03. This suggests that Larsen & Toubro offers a more attractive valuation relative to these competitors. Furthermore, while the stock has underperformed the Sensex over the past year, it has shown impressive returns over the longer term, with a 3-year return of 130.74% compared to the Sensex's 49.20%.
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