Bernstein raises LTTS stock target, maintains Underperform rating By Investing.com
Bernstein SocGen Group revised the target price for L&T Technology Services Ltd. (LTTS: IN) to INR4,680.00, from the previous target of INR4,070.00.
Despite the increase in price target, the company has maintained a high Underperform rating on the stock.
Bernstein SocGen Group analyst noted that the core IT services sector continues to show weakness, as LTTS is not meeting growth and margin expectations. The company's growth guidance is maintained at 8-10%+ year-on-year constant currency (CC%), but the analyst believes this target is at risk, given the challenging 4.5-7% quarterly growth rate required in the third quarter. and a quarter.
LTTS reported Earnings Before Interest and Taxes (EBIT) margins of 15.1%, which missed consensus by 100 basis points. Despite this miss and the upcoming third quarter earnings increase, the company kept its margin expectations at 16%. The analyst expressed concern about the medium-term outlook risk and considered the risk-reward profile to be negative.
LTTS' valuation is also a point of contention for Bernstein SocGen Group, with the stock trading at about 35 times the next twelve months' (NTM) Price to Earnings (P/E) ratio. Given these factors, the company's status is underperforming for LTTS.
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