Buy L&T Infotech, target price Rs 3480: Motilal Oswal

Motilal Oswal has given a buy rating to Larsen & Toubro Infotech with a target price of Rs 3480. The share price moved up by 0.85 per cent from its previous close of Rs 3094.70. The stock’s last traded price is Rs 3121.05.

Larsen & Toubro Infotech Ltd., incorporated in the year 1996, is a Large Cap company (having a market cap of Rs 53846.60 Crore) operating in IT Software sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 2998.40 Crore, up 1.67 % from last quarter Sales of Rs 2949.20 Crore and up 16.64 % from last year same quarter Sales of Rs 2570.70 Crore Company reported net profit after tax of Rs 456.80 Crore in latest quarter.


Investment Rationale
The brokerage has upgraded FY21/FY22 EPS estimates by 7%/11% as it adjusts to the margin surprise in the quarter. As digital becomes mainstream, it expects LTI to benefit from continued investments in digital capabilities, strong client additions, and mining abilities. TP implies 25x Sep’22 EPS (10% discount to TCS valuation).

Promoter/FII Holdings
Promoters held 74.4 per cent stake in the company as of Sept 30, 2020, while FIIs held 11.2 per cent, DIIs 6.4 per cent and public and others 8 per cent.