For the quarter ending December 2021, L&T Infotech's (LTI) consolidated net profit grew 18% to ₹612 crore as compared to ₹518 crore in the year-ago period whereas revenue from operations rose 31% to ₹4,137 crore. Shares of L&T Info slipped 0.4% at ₹6,660 on the BSE in Thursday's opening deals.
LTI reported its highest ever growth of 9.2% on a sequential basis CC (constant currency), ahead of estimates. While growth was broad based across verticals and service lines, Q3FY22 benefitted from pass through of revenue in India, as per Motilal Oswal.
“While we remain confident of the management’s execution capabilities, we remain on the sidelines in the stock, led by a significant valuation re-rating. We maintain our Neutral rating with target price of ₹7,170," suggested the brokerage in a note.
The company's management is confident of delivering a top-quartile revenue performance in FY22 on the back of strong broad-based demand, conversations with clients, and good progress on client mining.
“LTI reported beat in EBIT margins, 17.9%, +70bps QoQ despite supply side pressures aided by revenue growth and consistently improving offshore effort mix," highlighted Prabhudas Lilladher.
Deal pipeline continues to be robust with increasing number of transformation deals broken in to smaller deals with bias towards faster execution. LTI added 27 new logos this quarter and the Management is confident of sustaining growth momentum for next 3-5 years given business capability strengths coupled with strong demand environment.
LTI continues to remain one of its preferred pick in the midcap IT space. Prabhudas Lilladher has a Buy rating on the IT stock with a target price of ₹7,503.
Another brokerage Emkay has maintained Hold on L&T Infotech shares with a target price of ₹6,800 as strong broad-based revenue growth, continued strength in BFS and good progress across client buckets. It expects LTI to deliver a top-quartile revenue/earnings performance, but the valuation remains rich.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
