Buy Larsen and Toubro Infotech; target of Rs 5618: YES Securities

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26 Aug, 2025 12:21

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YES Securities' research report on Larsen and Toubro Infotech

L&T Infotech (INFO) reported strong financial performance for the quarter. While, the revenue growth was above estimates, EBIT margin came inline. It reported constant currency growth of 4.6% QoQ, led by BFS( up 29.1% YoY in cc terms) and Energy and Utilities( up 29.9% YoY in cc terms). The INR reported growth of 6.9% QoQ was supported by depreciation of INR by 3.4% QoQ vs USD. There was sequential improvement in EBIT margin(up 13 bps QoQ) led by improving pyramid and other efficiency measures. There was slight increase in reported employee attrition as LTM attrition increased by 50 bps QoQ to 24.3%. The multiyear technology adoption cycle broadly remains intact led by adoption of cloud and data analytics. However, the clients have become cautious regarding the evolving macroeconomic situation and there are signs that clients want to spread out investments especially in sectors such as manufacturing etc. and it poses near term risks. Employee attrition is expected to come down in H2FY23 and should support operating margin going ahead We estimate revenue CAGR of 18.4% over FY22‐24E with average EBIT margin of 17.4%.

Outlook

We maintain our BUY rating on the stock with revised target price of Rs 5,618/share at 29.0x on FY24E EPS. The stock trades at PER of 29.9x/24.1x on FY23E/FY24E EPS.

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L&T Infotech - 171022 - yes