L&T Technology Q4 Results Review - Inline Expectations; Uncertainty To Impact Growth Momentum: Axis Securities

Axis Securities Report

In Q4 FY24, L&T Technology Services Ltd. reported revenue of Rs 2,538 crore, up 5% QoQ. The company reported operating profits of Rs 428 crore, posting growth of 2.9% on a QoQ basis.

The company’s operating margins declined by 30 basis points to 16.9%, which was largely led by better cost management and reduced onsite expenses during the quarter.

Its net profit for Q4 FY24 stood at Rs 341 crore, registering a growth of 1.4% on a QoQ basis.

From a long-term perspective, we believe L&T Tech is well-placed for encouraging growth backed by multiple long-term contracts it has established with the world’s leading brands.

Furthermore, better revenue visibility gives us confidence in the company’s business growth moving forward.

However, rising concerns over the prospects of large economies along with prevailing supply-side constraints pose uncertainties over the company’s short-term growth rates.

We recommend a Hold rating on the stock and assign a 30 times price/earning multiple to its FY26E earnings of Rs 165.2/share to arrive at a target price of Rs 4,900/share, implying a downside of 5% from the current market price.

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