Prabhudas Lilladher recommended accumulate rating on Larsen and Toubro Technology Services with a target price of Rs 1780 in its research report dated January 17, 2019.
Prabhudas Lilladher's research report on Larsen and Toubro Technology Services
Post strong performance in Q3FY19, we upgrade LTTS USD revenue growth to 24.5% (earlier 24%) for FY19E. However, we downgrade USD revenue growth for FY20E to 17% (earlier 17.8%, client specific issues) and maintain 15.9% forFY21E. Our USD/INR assumptions are at 70/70.5/72 for FY19/FY20/FY21E. We model our EBIDTA margin assumptions at 17.6/17.9/18% for FY19/FY20/21E. Our EPS estimates are at Rs70.5/75/87 for FY19/20/21E, revised by +2%/-1.5%/
+0.2% respectively. Stock trades at 22.3x FY20E and 20.9x Sep20E EPS.
Outlook
We maintain our TP at Rs 1780 (22x Sep20E EPS). Retain Accumulate.
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