Sharekhan has given Buy recommendation for L&T Technology Services with a target price of Rs. 5900 in its research report issued on Oct 20, 2021

Outlook

LTTS is one of the best plays in the faster growing ERD space for its multi-industry expertise, deep engineering capabilities, end-to-end offerings, and long standing relationships with large enterprises worldwide. LTTS is well-placed to gain market share among global competitors because of being the preferred engineering partner among clients, strong customer-centric approach and a full-service model. We expect LTTS’ USD revenue and earnings to post a CAGR of 18% and 23% over FY2022-FY2024E. At CMP, the stock trades at 44x/37x its FY2023E/FY2024E earnings estimates, which justifies premium valuations, given strong deal wins, presence in the fast-growing ERD segment, and consistent dividend pay-outs. Hence, we retain a Buy on LTTS with a revised PT of Rs. 5,900.

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