India's L&T Technology misses Q3 revenue estimates

L&T Technology Services

15/01/2025 11:25

Jan 15 (Reuters) - Indian engineering and technology services firm L&T Technology Services  LTEH.NS  reported a
smaller-than-expected third-quarter revenue on Wednesday, on the back of softer spends from its automotive clients. 
        The Larsen and Toubro  LART.NS  group firm raised its revenue growth for fiscal year 2025 to near 10% from 8%-10% earlier, on the
back of acquiring U.S.-based software firm Intelliswift. 
    Its revenue rose 9.6% year-on-year to 26.53 billion rupees ($307.14 million) for the quarter ended Dec. 31.
    Analysts had expected a revenue of 26.65 billion rupees, according to data compiled by LSEG. 
    The company's mobility business unit posted a revenue growth of 4.1%, the slowest since the company started disclosing such numbers
from the first quarter of this fiscal year. 
    Net profit fell 4.1% to 3.22 billion rupees, lagging an estimate of 3.32 billion rupees. Profit declined on higher sales and
administrative costs.
    Shares of the company closed 3.1% higher ahead of results.    
    
KEY CONTEXT      
    Engineering, research and design (ER&D) services, which include technology support to industries such as transportation and
communications, contribute a sixth of the revenue to India's $254 billion technology sector.    
    Automakers have been facing issues of labour strikes in their factories across the globe while legacy players face the challenge of the
shift to electric vehicles. Analysts said this would impact quarterly earnings for L&T Technology.
    Last week, peer Tata Elxsi's shares tumbled 7.6% as it missed revenue estimates.
    
  
   PEER COMPARISON    
                                        Valuation (next   Estimates (next 12 months)   Analysts' sentiment                       
                                          12 months)                                                                             
                            RIC        PE       EV/EBITD  Revenue         profit       Mean       # of        Stock to price     Div yield
                                                A         growth(%)       growth(%)    rating *   analysts    target **          (%)
 L&T Technology Services                                                                                                         
 Tata Elxsi Ltd              TTEX.NS     40.47     28.83       9.32          8.36      SELL               13        0.95               1.18
 KPIT Technologies Ltd       KPIE.NS     24.42     27.07      17.20          21.02     BUY                15        0.78                051
 Tata Technologies Ltd       TATE.NS     28.46     31.29      11.41          15.71     HOLD               10        0.90               1.06
    
 * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
 ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
    
   OCT-DEC STOCK PERFORMANCE
  



($1 = 86.3780 Indian rupees)

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 (Reporting by Sai Ishwarbharath B; Editing by Mrigank Dhaniwala)
 ((aleefjahan.cs@thomsonreuters.com))