Sharekhan has given Buy recommendation for larsen and toubro technology services with a target price of Rs. 3400 in its research report issued on Jul 14, 2021
Sharekhan’s research report on larsen and toubro technology services
Q1 numbers strong; EBIT margin beat estimates at 17.3%; four out of five verticals grew by 4-8% q-o-q; deal win TCVs remained strong. LTTS raised its USD revenue growth guidance to 15-17% from 13-15% earlier, ahead of our expectations, led by broad-based growth across verticals, large deal wins, a healthy deal pipeline and higher spend on digital engineering. We expect USD revenue and earnings to clock a CAGR of 17% and 25%, respectively, over FY2021-24E. EBIT margin to sustain in medium-term, aided by revenue growth, operational efficiencies and higher digital revenue.
Outlook
We maintain a Buy on L&T Technology Services (LTTS) with a revised PT of Rs. 3,400, given its dominant position in the fast-growing ERD space, consistent deal wins and strong demand across segments.