1 day ago
Shares of L&Technology Services (LTTS) surged nearly 5% after global broking firm Macquarie upgraded the IT firm to ‘Outperform’ from ‘Underperform’ citing improved valuation and potential growth catalysts.
The broking firm has raised the target price to ₹6,530 per share, a potential upside of 33% from Thursday's closing level levels.
Despite still expecting LTTS to deliver below-peer growth, Macquarie sees value in the stock given its steep discount in comparison to other players in the sector. LTTS is currently trading at an 11% discount to Coforge and a 30% discount to Persistent Systems based on its estimated FY26 price-to-earnings (PE) ratio.
The brokerage also believes that the acquisition of Intelliswift could drive faster growth for LTTS, improving its business outlook.
Additionally, it anticipates a recovery in EBIT margins towards the 16-17% range (compared to an estimated 15.5% in FY25), which could act as a key catalyst. Growth acceleration remains another critical trigger for the stock’s performance.
In January, L&T Technology Services Ltd. (LTTS) secured a multi-year digital engineering transformation deal worth $80 million from a US-based industrial products and solutions manufacturer
The partnership aims to accelerate the client’s digital transformation by leveraging advanced technologies, particularly in the sustainability segment. LTTS did not disclose the client’s name but emphasised that the collaboration underscores its expertise in engineering and digital solutions for industrial sectors.
For the December quarter, L&T Technology Services recorded a 1.6% quarter-on-quarter growth in US dollar revenue, while constant currency revenue growth stood at 3.1%.
The company's EBIT margin improved by 80 basis points, reaching 15.9% for the quarter.
With the inclusion of Intelliswift, LTTS has projected a 10% full-year revenue growth. Organic growth for the year is expected to be 8%, which is at the lower end of its 8-10% guidance range.
Additionally, LTTS reported its highest-ever large deal bookings during the quarter, further strengthening its growth outlook.
Shares of L&Technology Services were trading 3.52% higher at ₹5,086 on the BSE around 10:23 am.
Catch live market updates with CNBC-TV18.com's blog
