Is L&T Technology overvalued or undervalued?
As of September 4, 2025, L&T Technology is considered overvalued with a PE ratio of 34.78 and an EV to EBITDA ratio of 22.22, despite strong returns on capital and equity, as it has underperformed the Sensex with a stock return of -26.8%.
As of 4 September 2025, L&T Technology's valuation grade has moved from very expensive to expensive, indicating a slight improvement in its perceived value. However, the company is still considered overvalued based on its current metrics. The PE ratio stands at 34.78, significantly higher than peers like TCS, which has a PE of 22.74, and Infosys at 22.28. Additionally, the EV to EBITDA ratio for L&T Technology is 22.22, again above TCS's 16.03 and Infosys's 14.61, reinforcing the overvaluation perspective.Despite a strong ROCE of 38.41% and ROE of 20.83%, the high valuation ratios suggest that L&T Technology's stock price does not align with its earnings potential compared to its peers. The company has underperformed relative to the Sensex over the past year, with a stock return of -26.8% compared to the Sensex's -1.98%, further supporting the conclusion that L&T Technology is overvalued in the current market environment.
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