Sharekhan has given Buy recommendation for Larsen and Toubro Technology Services with a target price of Rs. 4650 in its research report issued on Sep 02, 2021
Sharekhan’s research report on Larsen and Toubro Technology Services
LTTS aims to focus on six strategic areas with strong demand. A customer-centric approach, strong execution and long-standing relationship with clients would help LTTS to capture emerging opportunities. The management eyes $1-billion in annual revenues by Q2-Q3 of FY2023, which translates to a 3.3-4% CQGR. Further, in the long term, it eyes $1.5 billion in revenue in FY2025. We expect USD revenue/EPS to clock a CAGR of 19%/ 28%, respectively, over FY2021-24E. Management aims to achieve 18% EBIT margin by FY2025, aided by higher revenue growth, improving margins in the hi-tech vertical and change in revenue mix.
Outlook
We maintain a Buy on L&T Technology Services (LTTS) with a PT of Rs. 4,650, given its strong clientele, full spectrum of services and strong demand in the digital engineering space.