Several brokerages have provided varying assessments of L&T Technology Services (L&T Tech) following the company’s second-quarter results for FY25. While some see potential downside due to missed expectations on margins, others acknowledge the company’s maintained guidance for FY25. Here’s a summary of the latest brokerage views:
| Brokerage | Rating | Target Price (Rs) | Potential Downside | Key Insights |
|---|---|---|---|---|
| Morgan Stanley | Underweight | 4,730 | 11.18% | Q2 missed expectations; constructive commentary on deal pipeline and growth, but limited upside triggers and increased ask rate to meet revenue and margin guidance. |
| Nomura | Reduce | 4,840 | 9.11% | Marginally better revenues in Q2, but a margin miss. Achieving the 16% EBIT margin looks challenging, with FY25-27F EPS estimates cut by 2-5%. |
| Investec | Sell | 4,980 | 6.47% | Weaker-than-expected revenue and margin performance, though progress on SWC integration is promising. High-risk, low-reward scenario remains. |
| Citi | Sell | 4,860 | 8.73% | Tough ask rate for H2, though management sounded confident about QoQ revenue growth and margin improvement in Q3 despite wage hikes. |
Morgan Stanley: Maintains underweight, target price Rs 4,730
Morgan Stanley retained its underweight rating on L&T Tech with a target price of Rs 4,730, implying an 11.18% downside. The firm highlighted a Q2 miss but noted positive management commentary on the deal pipeline. However, the ask rate to meet revenue and margin guidance has increased, with limited upside triggers.
Nomura: Cuts target price to Rs 4,840, retains reduce rating
Nomura lowered its target price to Rs 4,840, suggesting a 9.11% downside. The brokerage described L&T Tech’s Q2 performance as a mixed bag, with marginally better revenues but a margin miss. Achieving the 16% EBIT margin goal appears difficult, and the firm reduced FY25-27F EPS estimates by 2-5%.
Investec: Maintains sell, hikes target price to Rs 4,980
Investec kept its sell rating but increased the target price to Rs 4,980, indicating a 6.47% downside. The firm cited weaker-than-expected revenue and margins but acknowledged the company’s progress on SWC integration. Despite this, Investec views the stock as high-risk with limited rewards.
Citi: Maintains sell, lowers target price to Rs 4,860
Citi maintained its sell rating, cutting the target price to Rs 4,860, implying an 8.73% downside. The brokerage noted that while management remained confident in QoQ revenue and margin growth, the ask rate for the second half remains difficult to achieve, even at the lower end of guidance.
L&T Tech’s current market price (CMP) stands at Rs 5,325.00, and the company has maintained its FY25 revenue and margin guidance despite the challenges ahead.
Disclaimer: This article is for informational purposes only and does not provide investment advice. Investors should consult with a financial advisor before making any investment decisions. Neither the publication nor the author holds any responsibility for investment outcomes based on the information provided.
