L&T : Value Buys, Quality of Management

While the previous post does not seem to be directly linked to the equity price or a buy/sell call. There are a few indicators of a value buy, based purely on the quality of management. Figure below shows the performance of L&T Script from 2001 to 2006 v/s scaled value of NSE for comparision. In all the last 6 years, it has managed to surpass the index. By a great margin during up cycle of the industry, and a small margin , during the down cycle, and giving consistently positive retuns year on year for the last 6 years. For a company into an industry, with a large cycle time, and keeping in mind the pressure it faced including the demerger issues and the takeover case, it goes miles to tell about the quality and professionalism of the management. Chart for years 2002-2006 are attached(L&T v/s Index Scaled at the beginning of each year):