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  • Case Study: Comparative Analysis of Larsen & Toubro Ltd. With Its Peers & Industry

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    SALONI Jaiswal
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    This document provides a comparative analysis of Larsen & Toubro Ltd (L&T) financial ratios with its peers (GMR, IRB Infra, IRCON International, Techno Electric) and the engineering and construction industry averages for fiscal years 2019, 2020 and 2021. Key financial ratios analyzed include current ratio, debt to equity ratio, interest coverage ratio, gross profit margin, net profit margin and return on equity. The ratios show that generally L&T performed better than its peers across the time period, with ratios closer to industry averages and ideal levels. However, some peers like GMR and IRB Infra saw losses in recent years as reflected by some ratios falling below zero.

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    This document provides a comparative analysis of Larsen & Toubro Ltd (L&T) financial ratios with its peers (GMR, IRB Infra, IRCON International, Techno Electric) and the engineering and construction industry averages for fiscal years 2019, 2020 and 2021. Key financial ratios analyzed include current ratio, debt to equity ratio, interest coverage ratio, gross profit margin, net profit margin and return on equity. The ratios show that generally L&T performed better than its peers across the time period, with ratios closer to industry averages and ideal levels. However, some peers like GMR and IRB Infra saw losses in recent years as reflected by some ratios falling below zero.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    15 views14 pages

    Case Study: Comparative Analysis of Larsen & Toubro Ltd. With Its Peers & Industry

    Uploaded by

    SALONI Jaiswal
    This document provides a comparative analysis of Larsen & Toubro Ltd (L&T) financial ratios with its peers (GMR, IRB Infra, IRCON International, Techno Electric) and the engineering and construction industry averages for fiscal years 2019, 2020 and 2021. Key financial ratios analyzed include current ratio, debt to equity ratio, interest coverage ratio, gross profit margin, net profit margin and return on equity. The ratios show that generally L&T performed better than its peers across the time period, with ratios closer to industry averages and ideal levels. However, some peers like GMR and IRB Infra saw losses in recent years as reflected by some ratios falling below zero.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 14

    Comparative Analysis of

    Larsen & Toubro Ltd. With its PEERs &


    Industry

    Case Study
    Saloni Jaiswal
    MBA 1st Yr.
    210247
    OBJECTIVES

    Learning Objectives
    This case is designed to achieve the following learning objectives:

    • To understand the financial statements of a Engineering & Construction


    company.

    • To analyze and interpret the financial ratios of the company.

    • To understand the various challenges in doing ratio analysis for the


    company.
    Current Ratio- L&T v/s PEERs

    4.00 3.74

    3.33 3.31
    3.50

    3.00

    2.50

    2.00 1.63
    1.38 1.42
    1.25 1.32 1.26 1.29
    1.50 1.23
    1.05 1.03 1.02
    0.84
    1.00 0.74 0.75 0.7
    0.47
    0.35
    0.50
    0.08

    0.00
    FY'19 FY'20 FY'21

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Current Ratio-L&T v/s Industry v/s Ideal Ratio

    4.81
    5.00

    4.50

    4.00

    3.50

    3.00

    2.50 2 2 2

    2.00 1.53 1.50


    1.42
    1.25 1.26
    1.50

    1.00

    0.50

    0.00
    FY'19 FY'20 FY'21

    L&T Industry Average* Ideal Ratio


    Debt to Equity ratio-L&T v/s PEERs

    5.00 2.02 2.49 2.09 2.62


    1.28 1.73
    0.650.010.65 0.44 0 0.070.02
    0.00
    FY'19 FY'20 FY'21 -0.72
    -1.11
    -5.00
    -5.45

    -10.00
    -11.45
    -15.00

    -20.00 -18.78

    -25.00

    -30.00 -29.22

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Debt to Equity ratio-L&T v/s INDUSTRY v/s IDEAL RATIO

    3.00
    2.02 2.09
    1.73
    2.00
    1 1 1

    1.00

    0.00
    FY'19 FY'20 FY'21

    -1.00
    -1.3567
    -2.00

    -2.4350
    -3.00

    -4.00

    -5.00 -4.8083

    L&T IndustryAverage* Ideal Ratio


    Interest Coverage Ratio-L&T v/s PEERs

    42.48% 42.92%
    45.00%

    40.00% 36.06%

    35.00%
    29.10%
    30.00%
    24.02%
    25.00% 22.60%

    20.00%

    15.00%
    8.5%
    10.00%
    5.8%
    4.1%
    2.32% 3.10%
    5.00% 2.18% 1.72% 1.66%
    0.53% 0.63% 0.44% 1.25% 0.55%
    0.24% 0.22%
    0.00%
    FY'19 FY'20 FY'21

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Interest Coverage Ratio-L&T v/s INDUSTRY v/s IDEAL RATIO

    600.00% 5.5 5.5 5.5

    500.00%

    400.00%

    300.00%

    200.00%

    100.00%
    8.5% 0.13 5.8% 0.13 4.1% 0.12

    0.00%
    FY'19 FY'20 FY'21

    L&T IndustryAverage* Ideal Ratio


    Gross Profit Margin-L&T v/s PEERs

    100.00% 91.14%

    90.00% 82.56%
    78.42%
    80.00%

    70.00%

    60.00% 50.98%
    46.71% 46.20%
    50.00%
    38.59%
    40.00% 31.91% 32.31% 31.18%
    29.97%
    27.49%
    30.00%

    20.00% 12.69% 13.93% 13.49% 12.84% 13.95% 14.39% 14.01% 12.69%


    8.93%
    10.00%

    0.00%
    FY'19 FY'20 FY'21

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Gross Profit Margin-L&T v/s INDUSTRY v/s IDEAL RATIO

    30.00%
    25.99%
    25.17%
    24.21%
    25.00%

    20.00%

    14.01%
    15.00% 12.69% 12.84%

    10.00%

    5.00%

    0.00%
    FY'19 FY'20 FY'21

    L&T IndustryAverage* Ideal Ratio**


    Net Profit Margin-L&T v/s PEERs

    50.00% 7.57% 7.44% 9.49%

    0.00%
    FY'19 FY'20 FY'21
    -50.00% -22.36%
    -43.20% -49.47%
    -100.00%

    -150.00%

    -200.00%

    -250.00%

    -300.00%

    -350.00%

    -400.00%

    -450.00%

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Net Profit Margin-L&T v/s INDUSTRY v/s IDEAL RATIO

    9.49%
    10.00%

    7.44%
    8.00%

    6.00% 4.79%

    4.00%

    2.00%

    0.00%
    FY'20 FY'21
    -0.46%

    -2.00%

    L&T IndustryAverage* Ideal Ratio


    Return on Equity-L&T v/s PEERs

    15.26%
    16.00%
    14.31% 14.31%
    13.45% 13.55%
    14.00%
    11.96%
    11.63%
    11.35% 11.24%
    12.00% 10.78%

    9.20% 8.88% 8.96%


    10.00%

    8.00%

    6.00%
    3.89%
    4.00%
    1.69%
    2.00%
    0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
    0.00%
    FY'19 FY'20 FY'19

    L&T GMR IRB INFRA IRCON INTERNATIONAL


    TECHNO ELECTRIC GIRIRAJ CIVIL D GAYATRI HIGHWAY
    Return on Equity-L&T v/s INDUSTRY v/s IDEAL RATIO

    15.26%
    16.00% 14.31% 14.31%

    14.00%

    12.00% 10.31%

    10.00% 8.76%
    7.67%
    8.00%

    6.00%

    4.00%

    2.00%
    0.00% 0.00% 0.00%

    0.00%
    FY'19 FY'20 FY'19

    L&T IndustryAverage* Ideal Ratio

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