Analysts see Rs 140-billion L&T-Schneider deal in positive light

Brokerages, which had estimated the electrical and automation business to fetch Rs 140-160 billion, say valuations are fair

Larsen & Toubro’s (L&T) definitive agreement with Schneider to sell its electrical and automation (E&A) business in an all-cash deal for Rs 140 billion (slightly more than $2 billion) is on expected lines of analysts.
 
Santosh Yellappu, analyst at India Nivesh, says, the deal valuations are fair and the company is pursuing its objective of becoming asset-light. Earlier Credit Suisse, too, had anticipated the electrical business’ value at ₹140-160 billion.
 
The business had reported net revenue of Rs 50.38 billion (about five per cent of overall) during FY2016-17, with Ebitda margins of about 15 per cent. Thus, the