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Shikari_Shambu
Senior Member
Joined: 04/Jan/2008
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Posts: 168
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   Posted: 23/Jun/2009 at 9:33pm |
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Smartcatjee,
Why next next L&T?Why not L&T? Is it because of valuations?
The reason I am asking is..from what I know, Infra is a HUGE HUGE opportunity...it is not as if L&T is saturated and therefore we need to look at smaller companies. Imagine the state of our ports,roads,etc. The scale is huge.Also add the brand of LT and the nuclear opportunity (LT is ready with all the JVs). And the icing is the demerger of LT into 5-6 separate listed companies in next few years which should unlock value.
Pls. note that I am asking this only to know how others feel about Infra.Dont know much about Era in any case. I too used to own LT,Punj and BHEL. Combined all to LT.
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furkanalam
Senior Member
Joined: 08/Nov/2007
Location: India
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Posts: 404
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Posted: 24/Jun/2009 at 1:09pm |
Saw a Kamal Nath interview on TV.....
His plans are to construct 35000 kms of roads and highways every year for the next five years......And he looks quite focussed at this....ready to relax many policies and get this development work in fast track.....
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smartcat
Senior Member
Joined: 29/Mar/2007
Location: India
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Posts: 4243
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Posted: 24/Jun/2009 at 9:16pm |
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L&T trading at a P/E of 32 and a market cap of Rs. 90,000 crores will not meet my personal "8 x 10" goal - increase in stock price by 10 times in 8 years. I might buy L&T only if its P/E falls to 10 - till then I'll wait!
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Hitesh Shah
Senior Member
Joined: 12/Oct/2008
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Posts: 3656
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Posted: 24/Jun/2009 at 9:25pm |
Originally posted by smartcat
L&T trading at a P/E of 32 and a market cap of Rs. 90,000 crores will not meet my personal "8 x 10" goal - increase in stock price by 10 times in 8 years. I might buy L&T only if its P/E falls to 10 - till then I'll wait! |
According to Rediff Money, Mundra Port, one of your holdings (& mine  ) has a P/E of 53....
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Shikari_Shambu
Senior Member
Joined: 04/Jan/2008
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Posted: 24/Jun/2009 at 11:11pm |
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Ok Smartcatjee..valuation is a justified reason..
However, I dont think the marketcap thing,etc is that valid. Reliance was at similar or bigger marketcap (about 700 rupees) in 2005 (before the brothers split). Now Reliance is at 2000+ (went to 3000 also remember)..Add Relcap,RCom,Rel Infra,RNRL and you will see that it is a multibagger.
Similar triggers exist for LT. Don't think of LT at 9 lakh crore marketcap (which wouldn't be that big in 8 years anyway). Think of 5-6 companies adding up to that much.
Elephants do dance!
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smartcat
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Joined: 29/Mar/2007
Location: India
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Posted: 24/Jun/2009 at 11:38pm |
Yeah, Mundra doesn't fit well into my 8 x 10 Tasveer. But unlike L&T, I expect Mundra's earnings to be "jumpy" - up 100%, then 10% and so on, because of the SEZ.
Shambu, splitting a company will not increase market cap - just like dividing a rice field into smaller ones will not increase its productivity. Remember that the largest companies in the world are single entities (GE, Walmart etc). You can become big via mergers/takeovers though (Eg: Exxon Mobil).
However, I do agree that L&T could get bigger. While L&T had revenues of $7 billion last year, global players like Siemens ($100 billion) and Bechtel ($31 billion) made a lot more.
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deveshkayal
Senior Member
Joined: 04/Sep/2006
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Posts: 3903
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Posted: 24/Jun/2009 at 11:48pm |
Originally posted by smartcat
Bank of India:
A PSB whose performance puts most, no wait, ALL private banks to shame. They have grown their net profits from Rs. 340 crores in FY05 to Rs. 3,000 crores in FY09 - that's a CAGR of 50%.
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Low provisions - High Profit !
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"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett
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subu76
Senior Member
Joined: 25/Feb/2008
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Posts: 5709
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Posted: 24/Jun/2009 at 11:58am |
Originally posted by smartcat
L&T trading at a P/E of 32 and a market cap of Rs. 90,000 crores will not meet my personal "8 x 10" goal - increase in stock price by 10 times in 8 years. I might buy L&T only if its P/E falls to 10 - till then I'll wait! |
Hi Smartcat, This is a very good point.
I think around 8-12 p/e is when Basant Sir entered L&T recently. I am still kicking myself for not buying L&T at those prices. 
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