Benefit from Current Valuations

In our July issue on companies having economic moats, we had picked Larsen & Toubro (L&T) due to its sheer size and technological superiority. Over the past few decades, L&T has grown into India’s biggest player in the capital goods sector. The technologies that it has acquired through alliances with the likes of Mitsubishi, Rolls Royce, Boeing and Westinghouse have played a critical role in its growth. However, the health of the capital goods sector is closely tied to the economic cycle. Owing to the ongoing downturn this stock’s price declined into triple digits recently. Current concerns Along with its Q2FY12 numbers, the management announced a two-third cut in incremental o