6- Dimensional Growth Path
According to Sharekhan, on its annual investor and analyst day 2021, L&T Technology Services highlighted on its enterprise strategy, both near-term and long-term outlook for 2025, a six-dimensional progress path, six strategic bets, customer-focused method to attain industry-leading progress and a sustainable working mannequin.
“The company wants to be among the top 5 global pure play engineering services providers of choice. We believe the company’s strength around 4Es (complex engineering, digital engineering, design engineering and business engineering) and strong frameworks across segments will provide significant headroom for growth,” the brokerage has stated.
According to Sharekhan, the administration goals to attain &greenback;1 billion annual income run price by Q2-Q3 of FY2023, which interprets 3.3%-4% CQGR. On long run, it aspires to attain &greenback;1.5 billion in income in FY2025, which suggests a 19.5% CAGR over FY2021- FY2025.
Valuations and causes to purchase the inventory of L&T Technology Services
“We expect USD revenue/EPS to clock a CAGR of 19%/ 28%, respectively, over FY2021- 24E. Management aims to achieve 18% EBIT margin by FY2025, aided by higher revenue growth, improving margins in the hi-tech vertical and change in revenue mix,” the brokerage has stated.
“At the current market price, the stock trades at 36x/31x its FY2023E/FY2024E earnings estimates, which justifies premium valuations, given anticipated large deal wins in the coming quarters, presence in the fast-growing ERD segment, and consistent payouts. On account of improving return ratios and free cash flow (FCF) generation, we retain a Buy on L&T Technology Services with a revised price target of Rs. 4,650 .., “according to the Share Khan report.
The above inventory is predicated on the report of Sharekhan. Investing in stocks is risky and buyers should do their own analysis. The writer, the brokerage companies, or Greynium Information Technologies usually are not accountable for any losses incurred as a result of a choice primarily based on the above article. Investors ought to therefore train due warning as are at file peaks. Please seek the advice of knowledgeable advisor.