Reduce Larsen and Toubro Technology Services; target of Rs 3870: ICICI Securities

ICICI Securities research report on Larsen and Toubro Technology Services

LTTS reported a slight underperformance on the revenue growth front, caused by the prevailing macro uncertainties. The company missed its 10% YoY guided revenue growth target mildly for FY25. Operating margin, at 13.2%, was down 270bps on account of Intelliswift consolidation impact. However, management maintained an optimistic outlook of double-digit YoY CC growth in FY26 and stuck to its medium term target revenue of USD 2bn led by confidence from large-deal bookings. We estimate that majority of FY26’s growth to be led by Intelliswift. Double-digit growth in FY26 is not a new development (already built in our model) and we expect macroeconomic conditions to impede deal conversion.

Outlook

Maintain REDUCE with a revised TP of INR 3,870 based on an unchanged one-year forward multiple of 25x.