Is L&T Technology overvalued or undervalued?

Oct 03 2025 08:08 AM IST
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As of October 1, 2025, L&T Technology is considered very expensive and overvalued, with a PE ratio of 34.96 and significant premiums over peers like TCS and Infosys, despite strong returns on capital and equity, while underperforming the Sensex with a year-to-date return of -11.66%.
As of 1 October 2025, the valuation grade for L&T Technology has moved from expensive to very expensive. The company is currently considered overvalued. Key ratios include a PE ratio of 34.96, an EV to EBITDA of 22.34, and a Price to Book Value of 7.30, all of which are significantly higher than its peers. For comparison, TCS has a PE ratio of 21.4 and Infosys has a PE ratio of 22.03, indicating that L&T Technology is trading at a premium relative to these competitors.

Additionally, while L&T Technology has a strong ROCE of 38.41% and ROE of 20.83%, the high valuation ratios suggest that the market may be pricing in excessive growth expectations. Recent stock performance shows that L&T Technology has underperformed the Sensex, with a year-to-date return of -11.66% compared to the Sensex's 3.64%, reinforcing the notion that the stock may be overvalued in the current market environment.
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