L&T Technology Services share price: L&T Technology shares tank 5% after Q4 results

Mabel R. Acton
NEW DELHI – Shares of L&T Technology Services (LTTS) fell along with headline indices on Friday, sliding as much as 5 per cent despite the company reporting a 35 per cent increase in consolidated net profit for the previous quarter.

The company, which posted a profit after tax of Rs 262 crore in Jan-Mar, had posted a net profit of Rs 194.5 crore the same time a year ago.

The firms’ counter fell to a low of Rs 4,030.05 as against the previous close of Rs 4,244.35 on the BSE. Meanwhile, the BSE Sensex and the Nifty50 were both trading 1 per cent lower at 9:45 am.

“LTTS reported a miss on revenue growth by 130 bps at 3.1 per cent QoQ USD vs an expectation of 4.4 per cent. In CC terms, revenues grew 3.6 per cent QoQ. Management guided for organic growth of 13.5-15.5% YoY USD for FY23 which is way below our/consensus revenue growth estimate of ~19%. While LTTS is well-positioned to play the ERD theme and grow at premium rates, we do not find the risk-reward favourable. We value the stock at 32x (earlier 34x) FY24E EPS. Maintain REDUCE rating with a revised target price of Rs 3,908 from Rs 4,413,” brokerage ICICI Securities said in a note.

“We achieved several milestones in FY22 – a dollar revenue growth of 20 per cent in constant currency, record high operating margins, and more than three-fold increase in patents filed by our engineers,” L&T Technology Services (LTTS) CEO and Managing Director Amit Chadha said in a statement.

“Our growth was broad-based with all five segments growing in double digits and showing an improvement in operating margins.”

The consolidated revenue from operations grew by about 22 per cent to Rs 1,756.1 crore from Rs 1,440.5 crore in the March 2021 quarter.

For the year ended March 31, 2022, LTTS’ consolidated profit grew by 44.27 per cent to Rs 957 crore, from Rs 663.3 crore in 2020-21.

The annual revenue from operations increased by 20.55 per cent to Rs 6,569.7 crore in 2021-22, from Rs 5,449.7 crore in the preceding fiscal.

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