L&T Tech — Valuations Capped With No Potential Upside, Says PL Capital Maintaining 'Hold' Post Q1 Results

L&T Tech revenues in Q1 missed the brokerage's and consensus estimates largely due to SWC seasonality which was mitigated by Intelliswift integration. L&T Tech reported revenue of $335 million, down 4.2% QoQ in CC and 2.8% QoQ in USD compared to our estimate of 2.5% QoQ CC decline and consensus estimates of flat revenue growth in USD..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..PL Capital Report.L&T Technology Services Ltd.'s revenue growth (-4.2% QoQ constant currency) was below our estimates (-2.5% QoQ CC), attributed to the SWC seasonality, however ex-India USD revenue grew by 1.5% QoQ. The mobility business (ex-Auto) has stabilized and picked up pace in the off-highway and trucks segments, while automotive sees incremental pauses and deferrals on executions. The weakness in the automotive is fairly balanced against the momentum within sustainability, validated through securing $50 million deal within the space. The deal ramp up would support the growth in H2, and even beyond the sizable win ($200m+ LD TCV) the deal pipeline seems to be robust. Given the revenue miss in Q1, the ask-rare translates to ~2.8% CQGR for the rest of the year to achieve low double-digit CC growth. We believe the large deal ramp up and positive SWC seasonality would support growth in H2 to achieve directional milestone. Margins were largely stable despite the notable revenue decline, partly aided by low-margin SWC seasonality and continued momentum in high-margin Sustainability business. We are adjusting our revenue growth against Q1 miss, while keeping our margin estimates largely unchanged. We are building in 9.8%/9.2% CC revenue growth, while keeping Ebit margins unchanged at 13.9%/14.7% for FY26E/FY27E. We are assigning 29x PE to FY27E EPS, translating a target price of 4,250. Valuations capped with no potential upside, maintain our Hold rating..Click on the attachment to read the full report:.'Buy' Tech Mahindra Shares Maintains Motilal Oswal Post Q1 Results; Sees Upto 24% Upside.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

L&T Tech — Valuations Capped With No Potential Upside, Says PL Capital Maintaining 'Hold' Post Q1 Results

L&T Tech during the quarter won several deals including one deal of $50 million, three deals of $20-30 million and six deals of $10 mn+ total contract value.

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