Buy L&T Technology Services, target price Rs 6,400: Motilal Oswal Financial Services
Motilal Oswal Financial Services recommends buying L&T Technology Services at a target price of Rs 6400. The current market price is Rs 5235.4. The firm expects a USD revenue CAGR of 10.7% over FY24-FY27, despite a slight reduction in EPS estimate...
By ETMarkets.com | Updated:
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Motilal Oswal Financial Services has buy call on L&T Technology Services Ltd. with a target price of Rs 6400.0. The current market price of L&T Technology Services Ltd. is Rs 5235.4. L&T Technology Services Ltd., incorporated in 2012, is a midcap company with a market cap of Rs 55481.01 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
For L&T Technology Services, the brokerage expects USD revenue CAGR of 10.7% over FY24-FY27, with EBIT margins of 15.7%/16.8%/17.0% in FY25/26/27. They have reduced their FY25/FY26/FY27 EPS estimates by 2.3%/2.0%/2.4% due to lower margins and the increased likelihood of missing revenue and margin guidance.
They expect the new GTM strategy to unfold new avenues for growth in the medium term, especially in hitherto weak areas such as mobility, which is growing fast across its peers. We reiterate our BUY rating on the stock with a revised target price of Rs 6,400 (Rs 6,600 earlier; premised on 40x Sep?26E EPS).
Financials
For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 2637.90 crore, up 4.51 % from last quarter total income of Rs 2524.10 crore and up 8.66 % from last year same quarter total income of Rs 2427.70 crore. The company has reported net profit after tax of Rs 320.00 crore in latest quarter.
Promoter/FII Holdings
Promoters held 73.69 per cent stake in the company as of 30-Jun-2024, while FIIs owned 4.46 per cent, DIIs 13.06 per cent.
L&T Technology Services Ltd. key Products/Revenue Segments include Service (Engineering) for the year ending 31-Mar-2024.
Investment Rationale
For L&T Technology Services, the brokerage expects USD revenue CAGR of 10.7% over FY24-FY27, with EBIT margins of 15.7%/16.8%/17.0% in FY25/26/27. They have reduced their FY25/FY26/FY27 EPS estimates by 2.3%/2.0%/2.4% due to lower margins and the increased likelihood of missing revenue and margin guidance.
They expect the new GTM strategy to unfold new avenues for growth in the medium term, especially in hitherto weak areas such as mobility, which is growing fast across its peers. We reiterate our BUY rating on the stock with a revised target price of Rs 6,400 (Rs 6,600 earlier; premised on 40x Sep?26E EPS).
Financials
For the quarter ended 30-09-2024, the company has reported a consolidated total income of Rs 2637.90 crore, up 4.51 % from last quarter total income of Rs 2524.10 crore and up 8.66 % from last year same quarter total income of Rs 2427.70 crore. The company has reported net profit after tax of Rs 320.00 crore in latest quarter.
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The company?s top management includes Mr.A M Naik, Ms.Aruna Sundararajan, Mr.R Chandrasekaran, Ms.Apurva Purohit, Mr.Luis Miranda, Mr.Narayanan Kumar, Mr.Sudip Banerjee, Dr.Keshab Panda, Mr.Abhishek Sinha, Mr.Amit Chadha, Mr.S N Subrahmanyan, Mr.Alind Saxena. Company has MSKA & Associates as its auditors. As on 30-06-2024, the company has a total of 11 Crore shares outstanding. Promoter/FII Holdings
Promoters held 73.69 per cent stake in the company as of 30-Jun-2024, while FIIs owned 4.46 per cent, DIIs 13.06 per cent.
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