1, March, 2024
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L&T Technology Services: Share Price Surges 3% Despite Soft Q3 Results – Analysis and Outlook

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L&T Technology Services witnessed a 3.5% rise in share price during Wednesday’s trading, defying soft Q3FY24 results. Despite missing Street estimates, the management maintained a robust FY24 growth guidance of 17.5–18.5%, hinting at a promising Q4, as per a report by Nuvama Institutional Equities.

Read Also | Nifty Stocks Hitting Record Highs in September 2023: L&T, Maruti, Axis Bank, and NTPC Lead the Way

Key Points:

  1. Market Response: Share prices resiliently rose, opening at ₹5,325.05, touching an intraday high of ₹5,535.60, showcasing market confidence despite softer Q3 results.
  2. Brokers’ Insights: In response to increased revenue visibility, Nuvama adjusted FY24E/25E/26E estimates and upgraded the stock to ‘BUY’ with a target price of ₹6,260, reflecting optimism for future growth.
  3. Technical Analysis: Analyst Rajesh Bhosale anticipates positive momentum, with prices likely to reach ₹5,650, supported by above-average volume. ₹5,300 is expected to act as a key support level.
  4. Management Optimism: L&T Technology services’ CEO expressed optimism, hinting at positive developments ahead. Nuvama anticipates significant revenue growth for the company and the ERD sector in the upcoming quarters.
  5. Brokerage Recommendations: Motilal Oswal Financial Services retains a ‘BUY’ rating, emphasizing the firm’s potential to benefit from increased ER&D expenditure, driven by digitization trends. The target price is set at ₹6,220.
  6. Financial Performance: L&T Technology Services reported a net profit of ₹336.2 crore in Q3FY24, marking a 13.3% YoY growth. Revenue increased by 12.3% to ₹2,421.8 crore. EBITDA registered a growth of 11.9%, with a margin of 17.2%.
  7. Outlook: Motilal Oswal projects robust sales growth in the coming years, citing the firm’s capabilities, multi-vertical presence, and the growing demand for outsourced ER&D services.

In conclusion, despite the softer Q3 results, market response, brokerage recommendations, and positive indicators from management suggest a promising future for L&T Technology Services. Investors are advised to consider expert opinions before making investment decisions.

Read Also | Spotify Thrives in Q3 2023: Profitability and Subscriber Surge

[Disclaimer: The views and recommendations are from individual analysts and brokers, and investors are advised to consult certified experts before making any investment decisions.]

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