L&T Technology Services Ltd. shares jumped 10.58% to Rs 3,993.20 on Wednesday after the company reported its Q2 FY27 results, with strong revenue and margin performance prompting JPMorgan and Nomura to raise their price targets. The stock was up Rs 381.90 from its previous close of Rs 3,611.30 as of 9:23 a.m.
The engineering services company's consolidated revenue rose 3.4% quarter-on-quarter to Rs 3,040 crore in Q2 FY27. Earnings before interest and tax (EBIT) increased 7.5% to Rs 495.9 crore, while the EBIT margin expanded to 16.3% from 15.7% in the previous quarter. Net profit rose 53.5% to Rs 548 crore.
The profit increase included a one-time gain of Rs 165 crore from the divestment of the Smart World and Communication business, according to the company's earnings call.
JPMorgan, Nomura Hikes Target Prices
JPMorgan raised its price target on L&T Technology Services to Rs 3,700 from Rs 3,300, while retaining its Neutral rating. The brokerage said the company beat revenue and margin estimates for the second consecutive quarter and pointed to a stronger outlook for the second half of FY27.
JPMorgan also raised its revenue and earnings estimates for FY27 to FY29 by 1–3%.
Nomura increased its price target to Rs 3,500 from Rs 3,290, retaining its Neutral rating. The brokerage highlighted the stronger-than-expected EBIT margin in Q2 FY27 and identified demand from data centres, the energy transition, robotics and plant engineering as potential growth drivers.
Nomura raised its earnings-per-share estimates for FY27 and FY28 by around 3–4%.
Citi Flags Risks
Citi retained its Sell rating on L&T Technology Services, with a price target of Rs 3,115. While describing the quarter as decent, the brokerage said the sustainability of the company's growth and margin performance remained a key concern.
Citi expects seasonal furloughs and wage hikes to test the company's performance in the December quarter, potentially weighing on growth and profitability.
L&T Technology Services has set a target of 13–15% annual revenue growth over five years, with EBIT margins in the 16–17% range. Chief Executive Officer and Managing Director Amit Chaddha said on the earnings call that the company expected the second half of FY27 to be stronger than the first half.
Chief Financial Officer Rajeev Gupta said the company expected to maintain EBIT margins around the mid-16% level in the near term, despite wage hikes planned for Q3 FY27.
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