Neutral Larsen and Toubro Technology Services; target of Rs 3502: YES Securities

YES Securities' research report on Larsen and Toubro Technology Services

L&T Technology Services (INFO) reported mixed financial performance for the quarter. While, the revenue growth was below with estimates, EBIT margin came slightly above expectation. It reported revenue growth of 0.4% QoQ in USD terms, led by Transportation vertical( up 4.4% QoQ) and Industrial products( up 0.9% QoQ). The INR reported growth of 2.7% QoQ was supported by depreciation of INR by 2.9% QoQ vs USD. There was sequential improvement in EBIT margin(up 51 bps QoQ) led by control on other expenses. There was slight decrease in reported employee attrition as LTM attrition decreased by 80 bps QoQ to 23.3%.

Outlook

We maintain our NEUTRAL rating on the stock with revised target price of Rs 3,502/share at 28.5x on FY24E EPS.