BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Centrum Broking Report
L&T Infotech’ s Q1 FY21 results were in-line with our estimates on U.S. dollar revenues, Ebit margins. Post in-line Q1 FY21, we maintain LTI’s USD revenue growth assumption to 4.7/14.2% for FY21/FY22E (verses 4.2/13% modelled earlier). LTI is the only company in the sector which has potential in deliver mid-single digit USD revenue growth for the full year FY21. Growth leadership is leading to disproportionate P/E multiple expansion. LTI now trades at 24.5 times one year forward earning per share (vs 20.5 times traded six months ago).
We modestly raise EPS estimates by 5.3/3.2% for FY21/FY22E. LTI currently trades at 20.7 times FY22E EPS which is at 14% discount to TCS and 2% premium to Infosys. Scale (Annual revenues of 1600 million U.S. dollar for FY21 and headcount of 31,470 employees), breath of vertical mix and growth leadership can help LTI sustain premium multiples. Stock has rallied swiftly over past one month up 22% and we expect some time correction.
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