Sharekhan has given Hold recommendation for Larsen and Toubro Technology Services with a target price of Rs. 3900 in its research report issued on Oct 18, 2022
Sharekhan’s research report on Larsen and Toubro Technology Services
LTTS reported revenue of $ 247.1 million for the quarter; up 3.1% QoQ and 13.6% YoY; in constant currency up 4.5% QoQ and 18 .1 % YoY which was in line with estimates. During the quarter the Company won $60 million plus deal and a deal with TCV of $10 million. The company also achieved its guided annual revenue run rate of $1bn in cc terms in this quarter and reiterated its aspirations of $1.5 billion annual revenue run-rate in cc terms for FY25. LTTS narrowed revenue growth guidance of 15.5-16.5% in CC terms for FY2023E.The management reiterated 18% EBIT margin guidance for FY23. The management indicated that LTM Attrition at 24.1% has peaked out and expects it to moderate going forward. The management expects a soft Q3FY23 due to impact of furloughs but are optimistic on achieving standard growth rate in Q4FY23.
Outlook
We maintain Hold rating on LTTS with a revised PT of Rs. 3,900, given the strong deal pipeline, steady ramp up of deal wins, continuation of strong performance in Transportation vertical and moderation of supply-side pressures.