Larsen & Toubro Falls by 200 in 2 days
Thu
28
Jan
2010
I was too busy with my day job and other activities that I lapsed on monitoring my portfolio of stocks I hold. Larsen and Toubro Ltd is one of the company where I hold part of my savings.
From 20-Jan-2010 to 22-Jan-2010 it fell more than 170 - roughly a 10% fall.
Eeek! Well, that was my reaction when I realized that. And after that I watched it for a couple of days while reviewing the news, I pulled out part of my investment in it.
It had reported a 50% drop in net profit this year (see more at L&T profit falls 50%)
Larsen and Toubro is a construction company, with a good history. I would have stayed invested with them, but the market these days is too fickle. Hence, I sold out part of the stock, while letting some stay invested.
Looking at the direction for the past couple of days, it is on a slow downard trend but I am not sure for how long. It needs to be monitored closely since when it turns around that would be the point to get back in.
What is your opinion? Post it below in comments.
Site Updates
Larsen & Toubro
Booking profits partly is always good, especially in cases where the market see-saws like mad. Case in point is the way the Indian markets have been behaving for the last 10 days.
Having said that, L&T is a conglomerate which is too big to fail and would create enormous value in the coming years. The company had planned an IPO of its IT unit L&T Infotech but had to cancel it when the markets tanked all the way to 8k levels.
It has a good number of companies running successfully in the JV format , and also bought DBS Chola's Mutual Fund arm in Sept 2009 through L&T Finance (Link)
Within the next couple of years, the company would take its Infotech and Finance arms public, creating value for existing shareholders.
A look at the lines of business, financials, and rich history of paying dividends would qualify this as a stock for long term investment.
Read an analysis of the Q3 results of L&T here, and also what highly rated analysts from IL&FS and Kotak have to say on the stock
Hold at the current levels, and accumulate on every decline is what i would suggest
A solid advice
and I must thank you for that, Raghavendra. This is way more indepth than most knee-jerk reactions I got. Thank you for thought out and referenced response as well as explaining things to me through mail. :)
Post new comment