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Larsen & Toubro Limited (LT)
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MINIMUM VIEWPORT: 900PX
DCF Implied Price
₹1,888.98
-53.8% vs mkt
From NSE filing
Market Price
₹4,087.00
As of 2026-11-05 · Close
Statements
FY26
Ended 2026-03-31
Enterprise Value
₹2.25L Cr
PV FCFF + PV TV
Terminal value 66.1% of EV
Equity Value
₹2.60L Cr
Net Debt Adjusted
WACC
13.72%
CAPM / Capital Cost
Terminal Growth (g)
4.00%
Gordon Growth
Valuation Drivers
base scenario
WACC & Capital Cost
Risk-Free Rate (Rf)6.78%
Beta (β)1.00
Equity Risk Premium (ERP)7.08%
Cost of Equity (Ke)13.86%
Pre-Tax Cost of Debt (Kd)13.81%
Effective Tax Rate (t)25.17%
After-Tax Cost of Debt10.34%
Weights (Equity / Debt)96.0% / 4.0%
Weighted Average Cost of Capital13.72%
Source: CAPM: Rfr=6.78% (INDIA market default for rfr (10Y sovereign yield %)), Beta=1.00 (INDIA market default for beta (beta vs index), Blume-adjusted), ERP=7.08% (INDIA market default for erp (Equity Risk Premium %)). Cost of Equity=13.86% = Rf + Beta x ERP. Pre-tax Cost of Debt=13.81% (after-tax 10.34%). Capital Weights: Equity=96.0%, Debt=4.0%.
Return Metrics & Financial Health
Terminal ROIC
14.2%
+0.5% vs WACC
FCF Yield (Yr 1)
7.1%
FCFF / Equity Val
Implied EV / EBIT
6.5x
Forward Multiple
Net Debt Position
+₹34,768
Net Cash Balance
FCFF & DCF Valuation Schedule
PV FCFF: ₹76,236 Cr
|PV TV: ₹1.49L Cr
|Net: +₹34,768@ 2026-03-31
|Price: ₹1,888.98
| DCF Line Item (Mid-Year) | FY27 | FY28 | FY29 | FY30 | FY31 |
|---|---|---|---|---|---|
EBIT (Operating Profit) EBIT (Operating Profit)Definition Earnings Before Interest and Taxes: core operating profitability before capital structure and taxes. Formula: Revenue - COGS - Operating Expenses - D&A | 34,850 | 37,408 | 39,660 | 41,615 | 43,301 |
Tax Rate % Tax Rate %Definition Effective corporate tax rate applied to operating earnings for NOPAT calculation. Formula: Taxes / PBT | 26.0% | 25.8% | 25.6% | 25.4% | 25.2% |
NOPAT NOPATDefinition Net Operating Profit After Tax: un-levered profit generated purely by core operations. Formula: EBIT × (1 - Effective Tax Rate) | 25,782 | 27,753 | 29,511 | 31,053 | 32,402 |
+ D&A + D&ADefinition Depreciation & Amortization added back because it is a non-cash accounting expense. Formula: Cash Flow Statement D&A Add-back | 5,433 | 5,832 | 6,183 | 6,488 | 6,750 |
− CapEx − CapExDefinition Capital Expenditures: net cash spent on property, plant, equipment, and intangible assets. Formula: Cash Flow Statement Capital Investments | (12,763) | (13,700) | (14,524) | (15,241) | (15,858) |
± ΔNWC ± ΔNWCDefinition Change in Non-Cash Operating Working Capital: cash invested or freed up in working capital. Formula: − (Δ Receivables + Δ Inventory − Δ Payables) | -1 | -39 | -35 | -30 | -26 |
= FCFF (Free Cash Flow) = FCFF (Free Cash Flow)Definition Free Cash Flow to Firm: unlevered cash flow available to all debt and equity capital providers. Formula: NOPAT + D&A − CapEx − ΔNWC − Stock Comp | 18,451 | 19,845 | 21,134 | 22,270 | 23,268 |
Discount Factor (Mid-Year) Discount Factor (Mid-Year)Definition Mid-year discount factor assuming cash flows arrive continuously throughout the year. Formula: 1 / (1 + WACC)^(t - 0.5) | 0.9378 | 0.8245 | 0.7250 | 0.6376 | 0.5607 |
PV(FCFF) PV(FCFF)Definition Present Value of Free Cash Flow discounted back to current fiscal year. Formula: FCFF × Mid-Year Discount Factor | 17,303 | 16,362 | 15,323 | 14,200 | 13,048 |
| Σ PV of Explicit Forecasts (PV FCFF) | ₹76,236 | ||||
| + PV of Terminal Value (4.0% g, 66% of EV) | ₹148,850 | ||||
| Enterprise Value (EV) | ₹225,086 | ||||
| + Net Cash & Liquid Assets | + ₹34,768 | ||||
| Equity Value DCF Implied Share Price | ₹259,854 ₹1,888.98 / share | ||||
WACC: 13.72%Cost of Equity: 13.86%Cost of Debt: 10.34%Equity Wt: 96.0%
Terminal ROIC: 14.2% (Reinvest 28.2%)
Financial Forecast Summary
| Line Item | FY27 | FY28 | FY29 | FY30 | FY31 |
|---|---|---|---|---|---|
| Revenue | ₹296,344 | ₹318,096↑ | ₹337,245↑ | ₹353,871↑ | ₹368,203↑ |
| EBITDA | ₹40,283 | ₹43,240↑ | ₹45,843↑ | ₹48,103↑ | ₹50,051↑ |
| EBIT (Operating Profit) | ₹34,850 | ₹37,408↑ | ₹39,660↑ | ₹41,615↑ | ₹43,301↑ |
| Net Profit (PAT) | ₹27,188 | ₹29,163↑ | ₹30,925↑ | ₹32,471↑ | ₹33,824↑ |
| D&A | ₹5,433 | ₹5,832↑ | ₹6,183↑ | ₹6,488↑ | ₹6,750↑ |
| CapEx | ₹12,763 | ₹13,700↑ | ₹14,524↑ | ₹15,241↑ | ₹15,858↑ |
| Operating Cash Flow | ₹32,619 | ₹34,955↑ | ₹37,073↑ | ₹38,928↑ | ₹40,548↑ |