Buy Larsen and Toubro Technology Services; target of Rs 6400: Motilal Oswal

Motilal Oswal's research report on Larsen and Toubro Technology Services

L&T Technology (LTTS)’s 2QFY25 revenue was up 3.9% QoQ /6.5% YoY in USD terms vs. our estimate of ~4.1% QoQ growth. In CC terms, revenue was up 3.4% QoQ/6.3% YoY). Growth was led by the Sustainability vertical (up 6.5% QoQ), followed by the Mobility vertical with 4.8% QoQ growth. EBIT was up 1.1% QoQ but down 4.9% YoY at INR3.8b (est. INR4.2b). PAT stood at INR3.1b (est. INR3.5b), up 1.9% QoQ/1.3% YoY. For 1HFY25, revenue/EBIT/PAT grew 7.4%/-3.9%/1.1% compared to 1HFY24. In 2QFY25, the company signed two USD20m deals and four USD10m deals.

Outlook

Our TP of INR6,400 (INR6,600 earlier) implies 40x Sep’26E EPS. We reiterate our BUY rating on the stock.