CLSA on L&T Technology Services - Recent deal wins improve the long-term growth outlook
L&T Technology Services (LTTS) has announced two large deal wins over the past week, including a US$100m, five-year deal from a US oil & gas major. More deals could follow as CLSA’s recent management interactions indicate a strong pipeline. The wins add to the steady (albeit slow) demand revival in the ER&D services market and should drive a meaningful improvement in revenue growth and margin. CLSA raised their FY22/FY23 Ebit by 8%/10% respectively. L&T Technology Services has been a minor participant in the sector rally, underperforming the Nifty IT Index by 16% over the past six months.
CLSA upgrades L&T Technology Services to outperform from underperform and raise their PE-based price target to Rs 2020 from Rs 1750: Youtube