Buy Larsen and Tourbo as Long Term Investment

Investors can consider taking advantage of recent market volatility to add the stock to their portfolio.

India’s largest engineering conglomerate, is better-positioned to weather risks such as firm commodity prices and a possible slowdown in industrial production. The recent announcement of a one-off loss in commodity hedging is unlikely to have any lasting impact on the company’s long-term growth prospects. At the current market price, the stock trades at 27 times estimated consolidated earnings for FY09.

We would suggest long term investors to buy this stock and invest with at least a five-year perspective to allow the company’s entry into high-potential segments such as shipyards and power equipment to flow through to earnings.