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Buy L&T Technology, target Rs 1940

We expect L&T Tech to grow its consolidated revenues at CAGR of 23 percent for the next two years and reach Rs 4895 crore in FY19 and Rs 5696 crore in FY-20 on back of large opportunity present across capex intensive business and sustained momentum of ramping up of existing clients.

 

With the rise of enabling technologies like 5G, IoT, Artificial Intelligence etc, the digital disruption now has expanded to almost each and every part of the global industrial complex including manufacturing and process industries. This has opened a new and bigger opportunity of more than USD 1.1 trillion market for engineering outsourcing market.
Larsen & Toubro Technology Services’ has multi-sectoral presence and domain expertise enables cross-pollination of ideas and best practices leading to differentiated engineering solutions.
During the latest quarterly results, the company has reported robust growth in revenues; it grew 33.2 percent in Q1-FY19 to USD 168.9 million as against USD 127.6 million in Q1-FY18 in constant currency terms.
We expect LTTS to grow its consolidated revenues at CAGR of 23 percent for the next two years and reach Rs 4895 crore in FY19 and Rs 5696 crore in FY-20 on back of large opportunity present across capex intensive business and sustained momentum of ramping up of existing clients.
At CMP the stock is trading at 2x times FY18E consolidated earnings and 16.9x times FY19E consolidated earnings.
MORE WILL UPDATE SOON!!
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