Hold Larsen and Toubro Technology; target of Rs 1872: Arihant Capital
Arihant Capital recommended hold rating on Larsen and Toubro Technology with a target price of Rs 1872 in its research report dated October 23, 2020.
October 23, 2020 / 03:34 PM IST
Arihant Capital 's research report on Larsen and Toubro Technology
L&T Technology Services’ (LTTS) Q2FY21 earnings were mixed. Consolidated revenue stood at Rs 13,138 Mn, below our estimate of Rs 13,993 Mn, registering a de-growth of 6.3% YoY and muted growth of 1.5% QoQ. Reported EBITDA was down by 17.8% YoY but grew by 13.1% QoQ to Rs 2,328 Mn, above our estimate of Rs 1745 Mn, while EBITDA margin contracted by 248bps YoY but expanded by182bps QoQ to 17.7% in Q2FY21. EBIT margins was up 161bps QoQ TO 13.7% in Q2FY21.. EBIT margins during the quarter improved primarily due to increase in utilization PAT for Q2FY21 declined by 19.6% YoY but rose by 41.2% QoQ to Rs 1,655 Mn, above our estimate of Rs 1407 Mn.
Thus We value LTTS at P/E of 26x to its FY22E EPS , which yields target price of Rs 1872 per share and assign Hold rating on the stock.
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