Fitch affirms 'BBB+' rating on Larsen & Toubro with stable outlook

Fitch Ratings said it has affirmed 'BBB+' rating with stable outlook on Larsen & Toubro and stressed that the ratings indicate strong financial structure and sound financial flexibility of the company.

"Fitch Rating has assigned India's Larsen & Toubro Limited (L&T) first-time Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'BBB+'. The Outlook is Stable," the rating agency said in a statement on Tuesday.

The ratings reflect the company's strong market position as a large global engineering and construction company with above-average profitability and solid revenue visibility.

"We believe L&T's robust record of steady margins, which is backed by adequate risk management and diversification into stable and high-margin IT and technical services businesses, buffers its ratings against the inherent risks in the E&C (engineering and construction) sector," it said.

The credit rating agency further said that the stable outlook reflects its view that the engineering major will maintain comfortable leverage, in spite of the higher growth investments, supported by sustained growth in Ebitda or earnings before interest, taxes, depreciation, and amortization generation and prudent financial management.