L&T Tech Q2 Review - Structural Theme Remains On Track: Motilal Oswal
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Motilal Oswal Report
L&T Technology Services Ltd. reported 6% QoQ constant currency growth in Q2 FY22, above our estimate of 5% QoQ constant currency, led by a broad-based performance across verticals.
Operating leverage led to Ebit margin improvement of 110 basis points QoQ to 18.4% (above our estimate of 16.8%), despite strong employee additions (up 6% QoQ) and lower utilisation (down 110 bps).
L&T Tech reported better-than-expected attrition of 16.5% (up 200 bps QoQ).
The 350 bps increase in the FY22E U.S. dollar revenue growth guidance to 19–20% (versus 15–17% in Q1) came as a welcome surprise.
While we were anticipating a raise, the quantum has surpassed our estimate of 19% and indicates a robust demand environment for engineering research and development services.
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