L and T Technology Services: A Strong Buy with Over 30% Upside Potential – Do You Own It?
L and T Technology Services Ltd (LTTS), a key player in Engineering Research and Development (ER&D), has caught the attention of global brokerage firm Macquarie. The firm recently upgraded LTTS from “Underperform” to “Outperform,” citing strong growth potential and a steep discount compared to its peers. With a revised target price of ₹6,530, this upgrade signals a potential upside of 33% from its previous closing price of ₹4,915.4.
Given the company’s solid financials, strategic acquisitions, and robust growth prospects, investors may find this a compelling opportunity. Here’s why LTTS stock might be a smart addition to your portfolio.
L&T Technology Services: Stock Performance & Price Movement
On Friday, LTTS stock experienced a strong rally, surging 4.72% to an intraday high of ₹5,159. By 2:00 PM, the stock was trading at ₹5,104.5, marking a 3.85% gain from its previous close of ₹4,915.4.
Long-Term Performance:
- 3-year return: 16%
- 5-year return: 192%
This consistent performance demonstrates the company’s ability to generate value for investors over the years.
What’s Driving the Rally?
Macquarie’s Upgrade & Growth Potential
Macquarie sees significant upside in LTTS despite projecting below-peer growth. The brokerage highlights the stock’s attractive valuation and growth opportunities, especially with its recent acquisition of Intelliswift Software Inc.
This $110 million acquisition (completed in January 2025) is expected to enhance LTTS’s expertise in software product development, AI, and platform engineering, further strengthening its global service offerings.
EBIT Margin Recovery
Macquarie also forecasts an EBIT margin recovery to 16-17% in FY26, up from an estimated 15.5% in FY25, which could drive earnings growth.
Strategic Deals & Expanding Business
LTTS has been actively securing large deals, including:
- A $80 million multiyear deal with a US-based industrial manufacturer (January 2025), focused on digital transformation.
- A $50 million deal closed in the previous quarter, marking the highest-ever deal wins for the company.
These partnerships are expected to boost revenues and strengthen LTTS’s market position.
Financial Performance & Key Ratios
LTTS has showcased steady revenue growth, although profits saw a slight dip. Here’s a look at the latest financial figures:
| Metric | Q3 FY24 | Q3 FY25 | Growth (%) |
|---|---|---|---|
| Revenue from Operations | ₹2,422 Cr | ₹2,653 Cr | +9.5% |
| Net Profit | ₹337 Cr | ₹320 Cr | -5% |
Key Financial Ratios:
| Metric | Value |
|---|---|
| Market Cap | ₹54,285 Cr |
| Current Price | ₹5,125 |
| 52-Week High/Low | ₹6,000 / ₹4,200 |
| Stock P/E | 43.9 |
| Book Value | ₹502 |
| Dividend Yield | 0.98% |
| ROCE | 33.4% |
| ROE | 25.8% |
| Debt to Equity | 0.12 |
| Price to Earnings | 43.9 |
| Promoter Holding | 73.7% |
| Industry P/E | 29.8 |
| Graham Number | ₹1,148 |
| Intrinsic Value | ₹1,932 |
| RSI | 48.5 |
| EPS | ₹117 |
| PEG Ratio | 3.90 |
| DMA 200 | ₹5,127 |
| Free Cash Flow (3Yrs) | ₹2,991 Cr |
| Free Cash Flow (Latest) | ₹1,101 Cr |
| Debt | ₹612 Cr |
Future Growth Outlook
LTTS’s $3 Billion Revenue Goal
The company has set an ambitious revenue target of $3 billion in the short-to-medium term. This will be driven by three key verticals:
- Mobility
- Sustainability
- Technology
Each division aims to scale to $1 billion in revenue, setting the stage for LTTS to become a $5 billion company in the long run.
CEO’s Optimism
CEO Amit Chadha remains bullish on growth prospects, expressing confidence that CY25 will outperform CY24. He emphasized the company’s strong deal pipeline and expansion strategy, which positions LTTS for sustained growth.
Should You Buy LTTS Stock?
With Macquarie’s upgrade, recent acquisitions, and strong financials, LTTS presents a solid investment opportunity for long-term investors.
✅ Reasons to Buy:
- Strong growth outlook with 30%+ upside potential
- Expanding business through acquisitions (Intelliswift Software Inc.)
- Robust deal wins, including an $80M contract
- Improving margins and revenue growth
- Solid promoter holding of 73.7%
⚠️ Risk Factors:
- Valuation remains higher than the industry P/E (43.9 vs. 29.8)
- Profit margins need to improve further
- Market volatility may impact near-term price movements
Given the strong growth drivers and potential for upside, LTTS looks like a compelling buy for long-term investors.
Do you own this stock? If not, is it time to add it to your portfolio? 🚀
Conclusion
L&T Technology Services (LTTS) is poised for strong growth, backed by strategic acquisitions, improving margins, and new deal wins. With Macquarie setting a ₹6,530 price target, investors looking for a high-growth ER&D stock should closely monitor this opportunity.
Would you consider adding LTTS to your portfolio? Let us know in the comments! 🔥💹
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.