India's L&T Technology posts marginal Q2 sales beat, maintains full-year forecast

L&T Technology Services

16/10/2024 13:02

Oct 16 (Reuters) - Indian engineering and technology services firm L&T Technology Services  LTEH.NS  on
Wednesday reported second-quarter revenue that edged past estimates, boosted by large deals signed in the
previous quarters, and maintained its full-year revenue forecast. 
    The company's revenue rose 7.8% to 25.73 billion rupees ($306.34 million) for the quarter ended Sept. 30.
Analysts had expected 25.67 billion rupees, according to data compiled by LSEG. 
    The Larsen and Toubro  LART.NS  group firm reaffirmed its full-year 2025 revenue growth forecast of 8-10% .
    Net profit rose 1.3% to 3.2 billion rupees in the quarter, lower than analysts' estimate of 3.33 billion
rupees.
    Shares of the company closed 0.7% higher, ahead of the results.    
        
  
    KEY CONTEXT 
    Engineering, research, and design (ER&D) services, which include technology support to industries such as
automotive and communications, contribute a sixth of the revenue to India's $254 billion technology sector.
    Companies such as L&T Technology Services and peer Tata Elxsi  TTEX.NS  are likely to benefit from growth in
the ER&D sector, which, according to the National Association of Software and Service Companies, is expected to
quadruple to as much as $170 billion between 2023 and 2030. 
    L&T Technology has bagged large deals from auto parts maker Forvia  FRVIA.PA  and energy giant Shell  SHEL.L 
in the last few quarters, aiding its revenue growth. 
    Last week, Tata Elxsi reported an increase in its second-quarter profit, with revenue in line with street
expectations, fuelled by healthy demand in its transportation unit.
    
    PEER COMPARISON    
                                   Valuation     Estimates (next 12          Analysts' sentiment         
                                   (next 12           months)                                            
                                    months)                                                              
                      RIC        PE     EV/EBI  Revenue     Profit    Mean     # of       Stock to       Div
                                        TDA     growth      growth    rating*  analysts   price          yield
                                                                                          target**       (%)
 L&T Technology        LTEH.NS   37.79   24.78    10.07       8.69    Sell            27      1.15           0.98
 Services                                                                                                
 Tata Elxsi            TTEX.NS   49.01   34.99    12.09      10.39    Sell            12      1.05           1.00
 Cyient                CYIE.NS   23.19   13.75    10.60      13.26    Buy             17      0.86           1.62
 KPIT Technologies     KPIE.NS   58.92   35.94    21.52      30.54    Buy             14      1.04           0.26
    * 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
    
    JULY-SEPTEMBER STOCK PERFORMANCE
    
    
    -- All data from LSEG

($1 = 83.9920 Indian rupees)

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 (Reporting by Sai Ishwarbharath B; Editing by Abinaya Vijayaraghavan)
 ((saiishwarbharath.b@thomsonreuters.com;))