Larsen & Toubro Infotech (LTI) reported a healthy set of Q4FY21 numbers Constant currency (CC) dollar revenues increased 4.4% QoQ (vs. our estimate of 4.5% QoQ). However, margins declined 133 bps QoQ to 21.9% (vs. our estimate of 21.5%). Digital (~46% of revenues) grew 7.5% QoQ, 22.3% YoY. The company has also won two large deals with net new TCV of US$66 million. LTI declared a dividend of Rs. 25/share.
Valuation & Outlook
LTI's ability to deliver end-to-end solutions right from cloud migration, core modernisation, data analytics and customer experience have enabled it to register industry leading growth. In addition, with the company's ability to win large deals, presence in niche verticals, effectively mine clients, adding Fortune 500 clients, and digital prowess bode well for long term revenue growth. This, coupled with healthy margins and recent correction in the stock prompt us to upgrade the stock from HOLD to BUY. We maintain our target price of Rs. 4580 (30x PE on FY23E EPS).
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_LTInfo_Q4FY21.pdf
Shares of Larsen & Toubro Infotech Ltd was last trading in BSE at Rs.3814.8 as compared to the previous close of Rs. 3912.75. The total number of shares traded during the day was 18147 in over 3023 trades.
The stock hit an intraday high of Rs. 3925 and intraday low of 3791.25. The net turnover during the day was Rs. 69262227.