Buy L&T Technology Services, target price Rs 5,862: Choice Equity Broking
Choice Equity Broking recommends buying L&T Technology Services with a target of Rs 5,862. The current price of the stock is Rs 5,135.8. LTTS aims for $2 billion revenue with a 17-18% EBIT margin in the medium term. Promoters hold 73.69% stake, wh...
By ETMarkets.com |
Agencies
Choice Equity Broking has a buy call on L&T Technology Services with a target price of Rs 5,862. The current market price of L&T Technology Services Ltd. is Rs 5,135.8. L&T Technology Services Ltd., incorporated in 2012, is a midcap company with a market cap of Rs 5,4316.88 crore, operating in IT Software sector.
L&T Technology Services Ltd. key Products/Revenue Segments include Service (Engineering) for the year ending 31-Mar-2024.
Investment Rationale
Choice Equity Broking says with a pipeline that includes substantial deals centered on consolidation and advanced technology-driven transformation, L&T Technology Services (LTTS) is confident in its vision and its medium-term outlook of achieving $2bn in revenue with an EBIT margin of 17-18%. Choice has introduced FY27E and expect Revenue/EBIT/PAT to grow at a CAGR of 12.5%/12.1%/13.4% respectively over FY24-FY27E. We maintain our rating to BUY with a revised target price of Rs 5,862 implying a PE of 35x on Sep-FY27E EPS of Rs 168.
Financials
For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 2,637.90 crore, up 4.51% from last quarter Total Income of Rs 2524.10 crore and up 8.66 % from last year same quarter's total income of Rs 2427.70 crore. The company has reported net profit after tax of Rs 320 crore in latest quarter.
During the quarter, LTTS won two $20 million deals, four $10 million TCV deals and two significant empanelment agreements in Sustainability. PAT for the quarter came at Rs 3,196 million, up 1.9% QoQ and 1.3% YoY with EPS at Rs 30.2.
Promoter/FII Holdings
Promoters held 73.69 per cent stake in the company as of 30-Sep-2024, while FIIs owned 4.35 per cent, DIIs 13.72 per cent.
L&T Technology Services Ltd. key Products/Revenue Segments include Service (Engineering) for the year ending 31-Mar-2024.
Investment Rationale
Choice Equity Broking says with a pipeline that includes substantial deals centered on consolidation and advanced technology-driven transformation, L&T Technology Services (LTTS) is confident in its vision and its medium-term outlook of achieving $2bn in revenue with an EBIT margin of 17-18%. Choice has introduced FY27E and expect Revenue/EBIT/PAT to grow at a CAGR of 12.5%/12.1%/13.4% respectively over FY24-FY27E. We maintain our rating to BUY with a revised target price of Rs 5,862 implying a PE of 35x on Sep-FY27E EPS of Rs 168.
Financials
For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 2,637.90 crore, up 4.51% from last quarter Total Income of Rs 2524.10 crore and up 8.66 % from last year same quarter's total income of Rs 2427.70 crore. The company has reported net profit after tax of Rs 320 crore in latest quarter.
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LTTS reported Q2FY25 revenues at $306.7 million, up 3.4% QoQ and 6.3% YoY in CC terms led by broad-based performance across all 3 segments. In USD terms, it was up 3.9% QoQ and 6.5% YoY whereas in INR terms, revenue came at Rs 25,729 million, up 4.5% QoQ and 7.8% YoY. During the quarter, LTTS won two $20 million deals, four $10 million TCV deals and two significant empanelment agreements in Sustainability. PAT for the quarter came at Rs 3,196 million, up 1.9% QoQ and 1.3% YoY with EPS at Rs 30.2.
Promoter/FII Holdings
Promoters held 73.69 per cent stake in the company as of 30-Sep-2024, while FIIs owned 4.35 per cent, DIIs 13.72 per cent.
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