Accumulate Larsen and Toubro Technology Services Ltd; target of Rs 5990: Asit C Mehta

Asit C Mehta report on Larsen and Toubro Technology Services Ltd

L&T Technology Services Ltd (LTTS) is a leading global pure-play engineering research and development (ER&D) services company. A subsidiary of Larsen & Toubro (L&T), LTTS offers design and development solutions throughout the product development chain across various industries including industrial products, transportation, telecom & hi-tech, and the process industry. LTTS leverages digital technologies, IoT, artificial intelligence/machine learning (AI/ML) and other cutting-edge tools to help clients develop innovative products and solutions. The company has a global presence with design and delivery centers in India and overseas. LTTS works with over 69 Fortune 500 companies and 57 of the top global ER&D spenders. With its multi-vertical expertise and capabilities to provide end-to-end services, LTTS is well-positioned to benefit from the growing trend of increased R&D outsourcing by global corporations. The company's focus on emerging technologies and digital engineering services aligns well with evolving client needs across industries.

Outlook

With an expected revenue CAGR of 9.9% (FY24-FY27E), we recommend an ACCUMULATE rating with a target price of INR 5,990, based on FY27E earnings and a PE multiple of 36.5x, reflecting its strong growth trajectory.

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