ICICI Direct is bullish on Larsen and Toubro Infotech has recommended buy rating on the stock with a target price of Rs 1940 in its research report dated May 03, 2019.
ICICI Direct's research report on Larsen & Toubro Infotech
Larsen & Toubro Infotech (LTI) reported revenue growth of 2% QoQ to US$353.8 million (vs. our estimate of 2.5%). Revenue growth was driven by manufacturing (8.3% QoQ) and high-tech, media & entertainment (11.4% QoQ) partly offset by 2.9% QoQ decline in the banking & finance segment (BFS). Decline in BFS was mainly due to challenges in top client. Digital business now constituting 38% of revenues, witnessed growth of 4.7% QoQ and 31.8% YoY in the quarter. EBITDA margin declined 142 bps QoQ to 19.2% on account of a dip in utilisation and investment in sales. Based on large deal wins, strength in diversified niche segments, we expect a healthy performance for the next two years and estimate growth of 15.4% CAGR to US$1796 million in FY19-21E with EBITDA margins of 19.3% in FY21E.
Hence, we maintain our BUY recommendation with a revised target price of | 1940/share (~18x FY21E EPS).
For all recommendations report, click here
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