Motilal Oswal is bullish on Larsen and Toubro Infotech has recommended buy rating on the stock with a target price of Rs 2060 in its research report dated May 20, 2020.
Motilal Oswal 's research report on Larsen and Toubro Infotech
Strong exit growth in FY20 coupled with healthy deal wins reiterates our confidence that L&T Infotech (LTI) could be one of the few outliers reporting revenue/earnings growth in FY21. The company's twisted seasonality (better 2H) should also help it dodge the peak COVID-19 impact (expected over 1H) to an extent. Notwithstanding some price concessions, we expect net margins to remain close to the lower end of the normal year guidance band (14-15%). Top clients/BFSI performance is a key monitorable. We keep our estimates largely unchanged and expect LTI to be a key beneficiary of the accelerated digital adoption in the post COVID-19 world. Reiterate Buy.
Industry leading 'growth' plus prudent capital allocation should defend its rich multiples. Our fair valuation is 19x 1-year forward P/E, at 15% discount to TCS. Reiterate Buy.
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