Buy Larsen and Toubro Technology Services; target of Rs 6500: Sharekhan

Sharekhan's research report on Larsen and Toubro Technology Services

Reported revenue stood at $307 million, up 3.4% q-o-q/ up 6.3% y-o-y in constant currency (cc) in line with our estimate. EBIT margin declined by ~50 bps q-o-q to 15.1%, missing our estimates of 16.2%. Deal wins were steady as company won two $20 million and four $10 million TCV deals along with two significant empanelment agreements in the sustainability vertical. Management is confident of broad-based growth continuing in the coming quarters and reaffirmed its FY25 guidance of 8-10% revenue growth in constant currency and aspiration of 16% EBIT margin levels.

Outlook

We maintain Buy on the stock with unchanged PT of Rs 6,500. At CMP, stock trades at 41.2/35.1/29.3x its FY25/26/27E EPS.