News

Published: Apr 28, 2023
Updated: Apr 28, 2023

L&T Technology Services Surges 8% on Robust Q4 Results and Positive Outlook

L&T Technology Services (LTTS) witnessed a significant surge of 8% in its stock price, reaching Rs 3,738.90 on the BSE. This rise comes on the back of the company's impressive Q4 results, which showcased substantial year-on-year growth in net profit and revenue. Additionally, LTTS has provided a strong outlook for FY24, projecting significant revenue growth.

Strong Q4 Results:

LTTS reported a notable 18% YoY increase in net profit, amounting to Rs 310.9 crore for the quarter ending March 2023. Revenue from operations also witnessed a substantial growth of 19.4% YoY and 2.3% QoQ, reaching Rs 2,096 crore. The transportation, plant engineering, and industrial products verticals were key contributors to this robust growth. In constant currency terms, the company achieved a 2.2% QoQ revenue growth, while in dollar terms, revenue grew by 2.9% QoQ to $255.1 million.

Positive Outlook for FY24:

LTTS has provided an optimistic outlook for the upcoming fiscal year. The company expects a CC revenue growth of 20% or higher, accompanied by organic growth of 10% or higher. The management is confident in the company's performance, citing a strong pipeline of negotiations and a healthy number of signed deals, similar to the previous year. LTTS concludes the year with its five key segments performing well, which bodes well for the company's prospects in the coming year.

Industry Analysis and Brokerage Firm's View:

Motilal Oswal Financial Services (MOFSL) notes that valuations in the Engineering and R&D (ER&D) services industry have corrected sharply in the past year, presenting an attractive opportunity. LTTS, with its solid capabilities, multi-vertical presence, and strong wallet share, is well-positioned to benefit from the increasing digitization driving accelerated spending in ER&D. MOFSL expects LTTS to deliver robust revenue growth in the coming years and maintains a positive outlook on the stock. They have raised their FY24-25 EPS estimates by 3% and reiterate their BUY rating, valuing LTTS at Rs 4,040 (premised on 26x FY25E EPS).

L&T Technology Services' stock witnessed a significant 8% surge following its impressive Q4 results and positive outlook for FY24. The company recorded notable growth in net profit and revenue, driven by strong performance in key verticals. LTTS remains optimistic about its future prospects, with a strong pipeline of deals and favourable segment performance. Analysts, such as MOFSL, view LTTS as a beneficiary of the growing ER&D services sector and expect the company to deliver robust revenue growth in the years to come.