Why is L&T still so cheap? Time to look at Federal Bank again? Deven Choksey answers

economictimes.indiatimes.com:

Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd, says “L&T on one hand, shows extremely high competitiveness in bidding and winning the contracts. On the other hand, the input cost control has to be there. In a given situation, which remains quite fluid, it is difficult for companies to maintain the margin beyond a point. Of course, they have got a pass over clause in most of their contracts. But all said and done, there are certain challenges in the margin. As a result of which, the margins have remained relatively more competitive. That is where they are probably not getting a higher valuation.”
Do you think a large part of the rally in the capex theme is done because in the last few weeks, we have seen sideways moves from the likes of Siemens and ABB. The big rally that we were witnessing a few months ago seems to have subsided, with the exception of L&T?
I guess a few things need to be observed. While most of the companies are continuing to take advantage of a good capex cycle in the country because of the government spending, the spending by the industry, etc. I feel the more important part is that these companies would have a probability of growth rate moderated between 15% and 20%.

Unlock Leadership Excellence with a Range of CXO Courses

If the economy is growing at 6.5%-7%, probably 15-20% kind of a growth rate would be a sustainable growth rate for most of these companies. Comparatively, most of the companies which are quoted in the market, have been driven by the euphoria and they started commanding the PE, particularly