THE BEST INVESTMENT OPPORTUNITY---- L&T

L&T--- The best investment bet (long term).

Larsen & Toubro
CMP - 2,999.0
PER - FY07 48.5 FY08E 32.5 FY09E 23.9
RoE(%)- FY07 26.1 FY08E 29.9 FY09E 31.0
Target - 4400+
Upside - 47%+

* Larsen & Toubro, the largest engineering and construction (E&C) company in India, is a direct beneficiary of the strong domestic infrastructure development and industrial capital expenditure (capex) booms. Consequently, we estimate the order inflows to grow at a CAGR of 20.7% between FY2007 and FY2010.
* The international business is expected to emerge as one of the key drivers going forward with immense opportunities from the Gulf Corporation Council markets.
* There lies innumerable opportunities in the new verticals in which the company is entering, namely ship building, defence, railways, thermal and nuclear power.
* We believe that there is a scope for further improvement in the margins on the back of rising operational efficiencies, larger ticket-size and more complex nature of orders, better raw material sourcing and integration, and higher contribution of its new businesses which carry higher margins.
* We value the core business of L&T at 28x FY2010E earnings, or Rs3,403 per share, while we value the subsidiaries at Rs1,025 per share of L&T. At the current levels, the stock is trading at 18.5x its FY2010E consolidated earnings.

According to us, one can buy the stock at around 2500-2600 in panic and keep it under the long term investmewnt portfolio for atleast 1 year. It is available at a throw away price and any improvement in the market condition and this stock will witness a sharp upside swing.
In these markets giving any kind of short term advice would be very very risky hence we would like you to do the same and wait for the bad wind to get past. The markets have fallen more then 32% from the top from 21206 and the worst hit indices are the small cap and mid cap index coming down almost 70% and 51% respectively. We would advice caution as we have been doing so from the 2nd week of Jan and also not to average at these levels.
RCOM may be coming out with some news on RELIANCE INFRATEL.... RISKY TRADERS CAN KEEP AN EYE ON THIS STOCK>> above 548---- 560 sure shot.

Keep you all posted in the weekends.

Happy Investing
Investomaniac
JAIDADIKI