Larsen & Toubro Key Ratios

ROE has improved significantly from 6.59% in 2021 to 17.83% in 2024, largely driven by an increase in asset turnover, which indicates more efficient use of assets.Despite a declining PAT margin from 8.52% to 5.91%, the company effectively managed its profitability under increased sales, resulting in improved overall ROE.Leverage has decreased slightly but is still high, supporting ROE through the use of debt to fuel asset growth.

Inventory days have decreased from 15.52 to 11.10, reflecting improved inventory management practices that minimize holding periods.Receivable days reduced significantly from 111.34 to 77.17, suggesting enhanced collection efficiency that frees up cash.Payable days have also decreased from 388.71 to 246.15, indicating a tightening of cash management strategies, ultimately improving the cash conversion cycle.

ROE has increased from 6.59% in FY2021 to 17.83% in FY2024, demonstrating enhanced equity efficiency largely driven by improved asset turnover.ROCE is also on an upward trend, rising from 9.97% to 14.86%, indicating effective use of both equity and debt in capital management.ROA has seen consistent growth from 1.52% to 4.70%, suggesting an overall uplift in asset performance contributing to improved returns.