Buy Larsen and Toubro Technology Services; target of Rs 4850: Sharekhan

Sharekhan's research report on Larsen and Toubro Technology Services

Reported revenue stood at $345.1 million, up 10.5% q-o-q in cc terms, missing our estimates of $352.6 million. EBIT margin fell by ~270 bps q-o-q to 13.2%, missing our estimates of 14.8%. The company recorded the highest-ever bookings during the quarter, including one $80+ million deal and one $50+million deal, among others. Management expects FY26 to be better than FY25, with a double-digit revenue growth in CC terms, and reaffirmed its medium-term outlook of $2 billion revenue. We have cut FY26/27 EPS by ~10% to factor increased uncertainty due to macro headwinds.

Outlook

We maintain a Buy rating, with a revised PT of Rs 4,850 (valued at 30x FY27E EPS). At CMP, the stock trades at 31.4/26.4x FY26/27E EPS .

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