L&T Technology Services - Q1 FY22 Result Report - YES Securities

(Rating: ADD, TP: Rs3,705, Upside: 7%)

- Reported revenue of $205.7 mn (up 4.2% in USD terms) which was as per estimate. Growth was led by better traction in industrial products with some softness in Medical Devices segment. Digital revenue now contribute 54% of revenue.

- EBIT margin grew 68 bps QoQ, which was above estimate, led by improvement in the quality of revenue and other productivity measures.

- Utilisation increased by 30 bps QoQ to 79.2%. LTM attrition increased by 230 bps QoQ to 14.5% due to higher demand for talent. Net addition of ~500 employees during the quarter

- Business outlook remains robust as it is witnessing higher traction in segments such as 5G, electric vehicles, green energy, etc. Strong deal wins reflect robust growth visibility in outsourcing of engineering services. However, most of that growth is priced in as It trades at 35.6x on FY23 earnings. Consequently, we maintain ADD rating on the stock with target price of Rs 3,705.

Shares of L&T Technology Services Ltd was last trading in BSE at Rs.3399.15 as compared to the previous close of Rs. 3465.65. The total number of shares traded during the day was 89916 in over 10721 trades.

The stock hit an intraday high of Rs. 3492 and intraday low of 3337.9. The net turnover during the day was Rs. 306187371.

Source : Equity Bulls

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