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