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Result
Update
July 19, 2019
CMP: | 1520 Target: | 1710 ( 13%) Target Period: 12 months
Larsen & Toubro Infotech (LTINFO)
HOLD
Operationally weak performance…
Larsen & Toubro Infotech (LTI) reported weak Q1FY20 results. Constant
currency (CC) revenues grew 1.0% QoQ and 12.9% YoY. Cross currency
headwind led to 0.8% QoQ growth in dollar revenues. Revenue growth was
led by 2.5% QoQ growth in volumes offset by a dip in realisation. We believe
the company’s growth was more inorganic than organic. Digital business
now constituting 38.9% of revenues, witnessed growth of 3.4% QoQ and
27.5% YoY in the quarter. Reported EBIT margin declined 318 bps to 16.0%
(below our estimate of 16.9%) mainly led by a decline in high-tech, media &
entertainment and manufacturing segment.
Client specific issues to drag FY20E, growth to recover in FY21E
The company in Q1FY20 was impacted by client specific challenges in top
account. Vertical wise, the company’s BFS growth was impacted by client
specific issues while manufacturing and energy & utilities registered a dip in
revenues due to absence of pass through revenues. This is also reflected in
its top five and top 10 clients, which have declined 2.1% QoQ and 3.5%
QoQ, respectively. Going forward, client specific issues are expected to
continue in BFS vertical while loss of client in high-tech, media &
entertainment will dent FY20E revenue growth. However, LTI has a knack of
winning large deals (one large deal in excess of US$40 million won in current
quarter) and keeps on adding Fortune 500 customers, which gives us belief
that it will be able to recoup growth from FY20E onwards. In addition, the
company has significant strength in digital and core modernisation, which
will help improve the deal pipeline in coming quarters. Hence, we expect the
company to register dollar revenue CAGR of 12.1% over FY19-21E.
Margin revised downwards but still superior to peers
EBITDA margins of the company in Q1FY20 were impacted by 100 bps of
higher visa cost, 100 bps S&M cost and 20 bps of employee cost partially
offset by 20 bps benefit from lease accounting and higher number of days.
Going forward, considering peaking of utilisation benefit, currency
headwind and client specific issues in high margin BFS, we revise our
EBITDA margins downwards to 18.6% and 18.7% in FY20E and FY21E from
19.6% and 19.3%, respectively, in our previous estimates.
Valuation & Outlook
We like LTI based on its digital story, strength in diversified niche segments
& core modernisation, ability to win large deals and better margin profile vs.
industry peers. However, near term concerns of client specific challenges
and currency headwind prompt us to revise our EPS estimates downwards
by ~10-11% in FY20E to FY21E. Hence, we downgrade the stock from BUY
to HOLD with revised target price of | 1,710 (18x FY21E EPS).
Key Financial Summary
s
(| Crore) FY17 FY18 FY19 FY20E FY21E CAGR (FY19-21E)
Net Sales 6,500.9 7,306.4 9,445.8 10,320.6 11,779.6 11.7%
EBITDA 1,230.4 1,187.6 1,883.4 1,921.5 2,204.5 8.2%
EBITDA Margins (%) 18.9 16.3 19.9 18.6 18.7
Net Profit 971.2 1,112.5 1,515.5 1,459.2 1,680.6 5.3%
EPS (|) 56.9 64.7 87.3 84.1 96.8
P/E (x) 26.6 23.4 17.4 18.0 15.6
RoE (%) 30.9 28.8 31.0 25.1 24.4
RoCE (%) 38.7 36.0 40.4 33.0 32.2
Source: Company, ICICI Direct Research
Particulars
Particular Amount
Market Capitalisation | 26301 crore
Total Debt | 0 crore
Cash and Investments | 2155 crore
EV | 24145 crore
52 week H/L 1990 / 1438
Equity Capital | 17 crore
Face Value | 1
Key Highlights
Client specific challenges hit Q1FY20
revenue growth
We expect revenue growth to
improve post FY20E onwards
Considering of peaking of utilisation
benefit, currency headwind and client
specific issues in high margin BFS we
have revised our EBITDA margins
downwards
Downgrade the stock from BUY to
HOLD with a revised target price of |
1,710
Research Analyst
Devang Bhatt
Deepti Tayal
ICICI Securities | Retail Research 2
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Exhibit 1: Variance Analysis
Q1FY20 Q1FY20E Q1FY19 YoY (%) Q4FY19 QoQ (%) Comments
Revenue 2,484.9 2,500.6 2,155.7 15.3 2,486.0 0.0
The company registered a growth of 0.8% QoQ in dollar terms
which was majorly led by inorganic growth. Vertical wise
revenues was driven by insurance (up 2.5% QoQ) and CPG,
Retail & Pharma (up 6.2% QoQ) which was partially offset by
Manufacturing (down 7.8% QoQ) and Energy & Utilities (down
1.9% QoQ)
Employee expenses 1,662.5 1,657.9 1,397.7 18.9 1,641.7 1.3
Gross Margin 822.4 842.7 758.0 8.5 844.3 -2.6
Gross margin (%) 33.1 33.7 35.2 -207 bps 34.0 -87 bps
Other expenses 364.5 382.6 339.0 7.5 367.8 -0.9
EBITDA 457.9 460.1 419.0 9.3 476.5 -3.9
EBITDA Margin (%) 18.4 18.4 19.4 -101 bps 19.2 -74 bpsEBITDA margins declined led by decline in High-Tech, Media &
Entertainment and manufacturing segment.
Depreciation & amortisation 61.1 37.5 37.8 61.6 37.1 64.7
EBIT 396.8 422.6 381.2 4.1 439.4 -9.7
EBIT Margin (%) 16.0 16.9 17.7 -171 bps 17.7 -171 bps
Other income 81.2 39.9 103.6 -21.6 64.8 25.3
PBT 478.0 462.5 484.8 -1.4 504.2 -5.2
Tax paid 122.5 117.9 123.6 -0.9 125.5 -2.4
PAT 355.5 344.6 361.2 -1.6 378.7 -6.1The decline in PAT was due to poor performance at operating
level
Key Metrics
Closing employees 29,347 29,500 25,150 16.7 28,169 4.2
Attrition (%) 18.3 18.3 15.1 320 bps 17.5 80 bps Attrition still high, expected to come down
Utilisation (%) (ex-trainees) 81.3 81.1 81.2 10 bps 81.1 20 bps
Average $/| 69.7 69.5 67.4 3.4 70.3 -0.8
Source: Company, ICICI Direct Research
Exhibit 2: Change in estimates
(| Crore) Old New % Change Old New % Change Comments
Revenue 10,870 10,321 -5.1 12,573 11,780 -6.3Client specific issues and currency prompt us to revise our
revenues estimates downwards
EBITDA 2,132 1,921 -9.9 2,422 2,204 -9.0
EBITDA Margin (%) 19.6 18.6 -100 bps 19.3 18.7 -55 bpsRevise EBITDA margin downwards led by peaking of utilisation and
other cost pressures
PAT 1,643 1,459 -11.2 1,863 1,681 -9.8
EPS (|) 94.6 84.1 -11.2 107.3 96.8 -9.8
FY20E FY21E
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 3
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Conference Call Highlights
FY20E outlook: The management indicated that FY20E growth will be
impacted by account specific challenges. They indicated that apart from
challenges in top account, it will also be impacted by spending
slowdown in one of its African banking client and 1% impact from
project ramp down in high-tech, media & entertainment segment.
Hence, the management believes growth will be more back ended
mainly led by large deal pipeline, bottoming out of slowdown related
challenges in BFS vertical and improving digital growth
Digital business: Digital business, now constituting 39% of revenues,
witnessed growth of 3.4% QoQ and 27.5% YoY in the quarter
Deal wins: The company won one large deal in Q1 in insurance with
net-new TCV of US$44 million. The company also highlighted four pillars
for its growth strategy i.e. 1) focus on large accounts, 2) invest in new
accounts, 3) open new accounts and 4) push for large deals. The
company believes this will help regain its growth. Further, we believe
the company continues to invest in S&M and has a very focused
marketing strategy that will help regain lost growth of FY20E in FY21E
Clientele update: Top client, which constitutes ~15% to revenue has
possibly declined in revenue due to a cut in client technology spending
and challenges in top client that resulted in subdued growth in banking
& financial services. Besides top account, there are challenges in African
banking account and ramp down in high-tech, media & entertainment
segment. Further, certain clients in India are entering stabilisation phase
which could impact revenue growth. As a result, revenues from top five
and top 10 clients which has declined 2.1% QoQ and 3.5% QoQ. The
company has won large deal in BFS and insurance vertical in previous
quarters which will help in boosting revenue growth. Further the
company highlighted that they have not lost any wallet share in existing
clients which also gives us confidence that the company will recoup
growth once spending improves
Employee details: The company added 1,178 employees in Q1FY20
taking total employees to 29,347. LTI’s attrition has also increased 80
bps to 18.3% which we believe is a cause of concern. As we believe
increasing attrition has a cost impact with it and also at times delays
growth
ICICI Securities | Retail Research 4
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Key Metrics
Exhibit 3: Geography wise split up
Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Revenue by geography (%)
North America 66.0 66.6 67.4 66.8 66.4 68.7
Europe 18.6 17.9 17.1 16.7 16.4 16.0
India 8.0 6.4 6.4 7.8 8.2 6.9
ROW 7.4 9.1 9.2 8.8 9.1 8.5
Growth QoQ (%)
North America 3.2 4.5 3.9 4.7 1.4 4.3
Europe 8.8 -0.4 -1.9 3.1 0.2 -1.7
India 0.3 -17.2 2.7 28.7 7.2 -15.2
ROW 21.7 27.3 3.8 1.0 5.5 -5.9
Source: Company, ICICI Direct Research
Exhibit 4: Vertical wise split up
Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Revenue by vertical (%)
BFS 28.7 30.9 29.9 29.1 27.7 27.7
Insurance 18.3 18.2 17.9 17.8 17.8 18.1
Manufacturing 17.3 15.7 15.4 15.6 16.6 15.2
Energy &Utilities 11.5 10.1 10.7 10.8 11.0 10.7
CPG,Retail&Pharma 9.0 9.1 10.2 10.6 10.6 11.1
HTME 10.6 11.3 11.2 11.3 12.4 12.5
Others 4.6 4.5 4.7 4.6 3.9 4.6
Growth QoQ (%)
BFS 11.5 11.5 -0.6 2.8 -2.9 0.8
Insurance -0.7 3.0 1.0 5.0 2.0 2.5
Manufacturing 5.9 -6.0 0.7 7.0 8.5 -7.7
Energy & Utilities 2.6 -9.1 8.8 6.6 3.9 -2.0
CPG, Retail & Pharma 3.0 4.7 15.1 9.7 2.0 5.5
High-Tech, Media &
Entertainment
5.3 10.4 1.8 6.5 11.9 1.6
Others 5.3 1.3 7.3 3.4 -13.5 18.8
Source: Company, ICICI Direct Research; HTME: High-Tech, Media & Entertainment
Exhibit 5: Service offering wise split up
Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Revenue by service offering (%)
ADM* 32.8 42.1 32.0 30.8 37.9 38.1
Enterprise Solutions 27.0 26.3 25.2 27.8 29.2 28.4
IMS 11.7 11.5 11.7 11.4 11.0 10.9
Analytics, AI & Cognitive 10.7 10.3 12.2 11.3 10.7 11.2
EIM 6.5 6.5 8.0 7.6 8.0 8.2
Platform Solutions 3.1 3.1 3.0 3.2 3.2 3.1
Growth QoQ (%)
ADM 3.1 32.9 -21.9 1.6 25.5 1.3
Enterprise Solutions 7.7 0.8 -1.6 16.5 7.1 -2.0
IMS 14.1 1.8 4.5 2.9 -1.6 -0.2
Analytics, AI & Cognitive 4.3 -0.3 21.6 -2.2 -3.4 5.5
EIM 2.1 3.5 26.4 0.3 7.4 3.3
Platform Solutions -6.8 3.5 -0.6 12.6 2.0 -2.4
Source: Company, ICICI Direct Research; *ADM: Application Development Maintenance is now combined with testing hence
certain quarters are not comparable, IMS: Infrastructure Management Services, EIM: Enterprise Integration & Mobility
Among geography, revenue growth was led by
North America due to acquisition. Revenues in India
region was impacted due to absence of pass through
revenues
BFS growth was muted mainly on the back of cut in
technology spends by top client. This was partially
offset by large deal won in Nordics. Manufacturing
and E&U vertical was impacted by absence of pass
through revenues
Decline in Enterprise and Platform solution dented
revenue growth
ICICI Securities | Retail Research 5
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Exhibit 6: Client & human resource matrix
Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 Q1FY20
Client metrics
5 Million dollar + 44 42 44 47 49 49
20 Million dollar + 13 13 14 15 17 19
50 Million dollar + 4 4 4 5 5 5
100 Million dollar + 1 1 1 1 1 1
Headcount, Utilization & Attrition
Employee count 24139 25150 26414 27513 28169 29347
Utilization (ex-trainees) 81.1 81.2 82.3 83.0 81.1 81.3
Attrition LTM 14.8 15.1 15.3 16.5 17.5 18.3
Source: Company, ICICI Direct Research
Increase in attrition is a concern
ICICI Securities | Retail Research 6
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Financial story in charts
Exhibit 7: Dollar revenues may grow at 12.1 % CAGR in FY19-21E
810887
970
1132
320 329 347 354
1349
357
1485
1695
-1%
10%9%
17%
23%21%
18%
14%
19%
11%10%
14%
-5%
0%
5%
10%
15%
20%
25%
0
200
400
600
800
1000
1200
1400
1600
1800
FY15
FY16
FY17
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
Q1FY20
FY20E
FY21E
(%)
($ mliion)
Dollar revenue Growth, YoY
Source: Company, ICICI Direct Research
Exhibit 8: Revise our margin estimates downwards
20.2
17.5
18.9
16.3
19.4
20.5 20.6
19.2
19.9
18.4 18.6 18.7
12.0
14.0
16.0
18.0
20.0
22.0
FY15
FY16
FY17
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
Q1FY20
FY20E
FY21E
(%)
EBITDA Margin
Source: Company, ICICI Direct Research
Exhibit 9: PAT trend
Source: Company, ICICI Direct Research
761837
971 1113
361400 376 379
1516
356
1459
1681
7.3%9.9%
16.1% 14.5%
35%
47%
33%31%
36.2%
-2%-3.7%
15.2%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
200
600
1000
1400
1800
FY15
FY16
FY17
FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
FY19
Q1FY20
FY20E
FY21E
(%)
(| crore)
Adjusted PAT Growth, YoY
ICICI Securities | Retail Research 7
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Exhibit 10: One year forward rolling PE
100
700
1,300
1,900
2,500
3,100
Jul-16
Dec-16
May-17
Oct-17
Mar-18
Aug-18
Jan-19
Jun-19
(|)
Price 10x 15x 20x 25x 30x
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 8
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Exhibit 11: Recommendation History* vs. Consensus
80.0
100.0
0
500
1,000
1,500
2,000
2,500
Jul-19May-
19
Apr-
19
Feb-
19
Jan-
19
Nov-
18
Oct-
18
Aug-
18
Jun-
18
May-
18
Mar-
18
Feb-
18
Dec-
17
Nov-
17
Sep-
17
Aug-
17
Jun-
17
May-
17
Mar-
17
Jan-
17
Dec-
16
Oct-
16
(%
)
(|)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Bloomberg, Company, ICICI Direct Research,* listed in July 2016
Exhibit 12: Top 10 Shareholders
Rank Name Latest Filing Date% O/S Position (m) Change (m)
1 Larsen & Toubro Ltd 31-Mar-19 74.8% 129.8 0.0
2 Naik (Anilkumar Manibhai) 31-Mar-19 1.2% 2.1 0.0
3 UTI Asset Management Co. Ltd. 31-Mar-19 1.1% 1.9 0.0
4 ChrysCapital Advisors LLP 31-Mar-19 1.0% 1.8 0.0
5 Motilal Oswal Asset Management Company Ltd. 31-May-19 1.0% 1.7 -0.1
6 HDFC Asset Management Co., Ltd. 31-May-19 0.9% 1.6 0.0
7 Goldman Sachs Asset Management International 31-May-19 0.8% 1.3 0.0
8 DSP Investment Managers Pvt. Ltd. 31-May-19 0.7% 1.3 0.0
9 ICICI Prudential Asset Management Co. Ltd. 30-Jun-19 0.7% 1.1 -0.2
10 The Vanguard Group, Inc. 31-May-19 0.5% 0.9 0.0
Source: Reuters, ICICI Direct Research
Exhibit 13: Recent Activity
Investor name Value Shares Investor name Value Shares
Matthews International Capital Management, L.L.C. 7.85m 0.32m BlackRock Institutional Trust Company, N.A. -7.77m -0.31m
Mirae Asset Global Investments (India) Pvt. Ltd. 4.03m 0.16m ICICI Prudential Asset Management Co. Ltd. -6.44m -0.24m
Capital Investment Trust Corporation 1.96m 0.08m Baroda Asset Management India Ltd -4.89m -0.18m
Ankalikar (Arvind) 1.91m 0.08m Florida State Board of Administration -2.29m -0.09m
Manulife Asset Management (Asia) 1.58m 0.06m Calamos Advisors LLC -2.20m -0.09m
Buys Sells
Source: Reuters, ICICI Direct Research
Exhibit 14: Shareholding Pattern
Shareholder Dec-18 Mar-19 Jun-19
Promoter 74.8 74.8 74.8
Public 25.2 25.2 25.2
Total 100.0 100.0 100.0
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 9
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
Financial summary
Exhibit 15: Profit and loss statement | crore
(Year-end March) FY18 FY19 FY20E FY21E
Total Revenues 7,306 9,446 10,321 11,780
Growth (%) 12.4 29.3 9.3 14.1
Employee costs 4,376 6,164 6,274 7,172
Total Operating Expenditure 6,119 7,562 8,399 9,575
EBITDA 1,188 1,883 1,921 2,204
Growth (%) (3.5) 58.6 2.0 14.7
Depreciation & Amortization 156 147 237 247
Other Income 410 292 275 314
Interest - - - -
PBT before Exceptional Items 1,442 2,028 1,959 2,271
Growth (%) 16.6 40.7 (3.4) 15.9
Tax 329 512 499 590
PAT before Exceptional Items 1,113 1,516 1,459 1,681
PAT 1,113 1,516 1,459 1,681
Growth (%) 14.5 36.2 (3.7) 15.2
Diluted EPS 64.7 87.3 84.1 96.8
EPS (Growth %) 13.6 35.0 (3.7) 15.2
Source: Company, ICICI Direct Research
Exhibit 16: Cash flow statement | crore
(Year-end March) FY18 FY19 FY20E FY21E
PBT 1,442 2,028 1,959 2,271
Add: Depreciation 156 147 237 247
(Inc)/Dec in current assets (576) (543) (169) (282)
Inc/(Dec) in current liabilities 200 237 11 19
CF from operations 844 1,395 1,405 1,605
(Inc)/dec in other investments (250) (377) (578) (543)
(Inc)/dec in Fixed Assets (98) (153) (175) (165)
Other investing cash flow 2 2 2 7
CF from investing Activities (461) (744) (751) (701)
Issue of equity 0 0 - -
Inc/(dec) in loan funds (41) (59) 0 -
Dividend paid & dividend tax (353) (534) (550) (592)
Others (14) (2) - -
CF from Financial Activities (408) (594) (550) (592)
Net cash flow (24) 57 104 311
Effect of exchange rate changes 8 (5) - -
Opening cash 380 363 415 519
Closing cash 363 415 519 830
*calculated; Source: Company, ICICI Direct Research
Exhibit 17: Balance sheet | crore
(Year-end March) FY17 FY18 FY19 FY20E FY21E
Liabilities
Equity 17 17 17 17
Reserves & Surplus 3,843 4,876 5,786 6,874
Networth 3,860 4,894 5,803 6,891
Long term Liabilties & provisions 145 128 140 159
Total Debt - - - -
Source of funds 4,006 5,023 5,944 7,051
Assets
Net fixed assets 252 308 281 243
Net intangible assets 159 138 104 59
Goodwill 276 495 495 495
Other non current assets 501 558 609 664
Unbilled revenue 837 558 610 696
Debtors 1,396 1,826 1,995 2,278
Current Investments 1,264 1,740 2,440 3,140
Cash & Cash equivalents 363 415 519 830
Other current assets 334 630 689 739
Trade payables 389 467 510 582
Current liabilities 987 1,179 1,289 1,512
Application of funds 4,006 5,023 5,944 7,051
Source: Company, ICICI Direct Research
Exhibit 18: Key ratios | crore
(Year-end March) FY18 FY19 FY20E FY21E
Per share data (|)
EPS 64.7 87.3 84.1 96.8
Cash Per Share 21.1 23.9 30.0 47.9
BV 224.4 281.9 334.3 397.0
DPS 21.5 28.1 27.0 29.1
Operating Ratios (%)
EBITDA Margin 16.3 19.9 18.6 18.7
PBT Margin 19.7 21.5 19.0 19.3
PAT Margin 15.2 16.0 14.1 14.3
Turnover Ratios
Debtor days 70 71 71 71
Creditor days 19 18 18 18
Return Ratios (%)
RoE 28.8 31.0 25.1 24.4
RoCE 36.0 40.4 33.0 32.2
RoIC 43.4 60.5 56.4 63.5
Valuation Ratios (x)
P/E 23.4 17.4 18.0 15.6
EV / EBITDA 20.8 12.8 12.1 10.1
Market Cap / Sales 3.6 2.8 2.5 2.2
Solvency Ratios
Current Ratio 1.9 1.8 1.8 1.8
Quick Ratio 1.3 1.5 1.5 1.4
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 10
ICICI Direct Research Result Update | Larsen & Toubro Infotech
Exhibit 19: ICICI Direct coverage universe (IT)
CMP M Cap
(|) TP(|) Rating (| Cr) FY18 FY19 FY20E FY18 FY19 FY20E FY18 FY19 FY20E FY18 FY19 FY20E FY18 FY19 FY20E
Cyient (INFENT) 477 475 Hold 5,371 36.0 42.4 38.6 13.3 11.3 12.4 8.2 7.3 7.2 21.4 21.4 17.7 17.3 18.7 15.2
Eclerx (ECLSER) 637 860Reduce 3,532 72.9 60.0 63.1 12.7 15.5 14.7 8.0 9.1 9.2 28.2 21.5 24.8 24.1 16.5 18.9
Firstsource (FIRSOU) 51 60 Buy 3,502 4.8 5.4 5.9 10.7 9.4 8.6 8.8 7.2 6.2 13.0 14.0 15.7 13.9 13.9 13.8
HCL Tech (HCLTEC) 1,019 1,190 Hold 146,833 62.6 74.7 76.7 17.3 14.5 14.1 12.5 10.1 9.1 27.4 26.5 26.0 23.8 24.5 22.5
Infosys (INFTEC) 785 845 Hold 335,118 32.3 35.4 39.4 23.8 21.7 19.5 16.2 14.8 13.0 30.9 32.9 32.8 22.5 23.7 24.3
MindTree (MINCON) 671 635Reduce 11,313 34.3 45.9 37.7 20.1 15.0 18.3 14.3 9.7 10.0 24.9 29.8 24.4 20.8 22.8 17.0
L&T Intotech (LTINFO) 1,520 1,710 Hold 26,301 64.7 87.3 84.1 23.4 17.4 18.0 20.8 12.8 12.1 36.0 40.4 33.0 28.8 31.0 25.1
NIIT Tech (NIITEC) 1,345 1,395 Hold 7,677 45.6 65.7 76.1 27.8 19.0 16.7 13.8 10.4 8.9 19.4 24.2 24.3 15.8 19.9 20.2
Persistent (PSYS) 577 650 Hold 5,119 40.5 44.0 48.7 15.8 14.6 13.2 9.1 7.1 6.4 19.8 20.5 20.5 15.2 15.0 14.9
TCS (TCS) 2,077 2,080 Hold 790,125 67.4 83.8 88.8 31.2 25.0 23.7 23.0 18.9 17.2 37.6 43.8 43.2 29.6 34.4 33.9
Tech M (TECMAH) 675 845 Hold 67,723 42.8 47.7 51.4 17.6 15.8 14.6 13.4 9.5 8.2 21.5 23.6 23.2 20.2 21.2 19.8
Wipro (WIPRO) 265 315 Buy 160,796 12.7 14.9 16.4 21.1 17.9 16.2 13.8 11.1 10.0 16.9 17.8 17.3 16.6 15.8 15.9
EV/EBITDA (x)P/E (x)
Sector / Company
RoE (%)RoCE (%)EPS (|)
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 11
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
RATING RATIONALE
ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%
Pankaj Pandey Head – Research [email protected]
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
ICICI Securities | Retail Research 12
ICICI Direct Research
Result Update | Larsen & Toubro Infotech
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