Citi Research on Wednesday revised L&T Technology Services Ltd.'s target price downward to Rs 4,500 from Rs 4,860, while maintaining its 'sell' rating on the stock. This implied a downside of 5% against the last traded price.
The firm also revised Tata Technologies Ltd.'s target price to Rs 835 from Rs 900, while retaining the 'sell' tag. This marked a downside of 6.3% as compared to the last traded price.
The adjustment for both companies is driven by "ongoing concerns in the auto vertical", the brokerage said in a note.
Bull And Bear Case Scenarios
In a bull case scenario, Citi sees Tata Technologies scaling to Rs 975, which suggests an upside of 9.4%. This target price is based on the assumption that the company's fiscal 2026 revenue growth accelerates 14% year-on-year, and rupee depreciation continues to 87.5 against the dollar.
On the flip side, the brokerage sees the target price dwindling to Rs 775 in a bear case scenario, marking a downside of 13%. This could happen if the rupee strengthens, and the revenue slips by 10% in fiscal 2026.
Notably, the weakening of rupee bodes well for IT firms as a bulk of their clients are based in the US, who are billed in dollars.
Citi sees L&T Technology's stock rising to Rs 5,280 in a bull case scenario, which could mark an upwide of 11%. For this, the fiscal 2026 revenue growth should be around 13%, and the rupee should depreciate to 87.5.
In a bear case scenario, where the rupee gains strength and fiscal 2026 revenue falls by 8%, the stock could dwindle to Rs 4,070, suggesting a downside of 14% against the last traded price, as per the note.
Shares of Tata Technologies closed 0.06% lower at Rs 890.80 apiece and L&T Technology closed 0.83% lower at Rs 4,698.10 apiece on the NSE, compared to a 0.41% advance in the benchmark Nifty 50.
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