17 Oct , 2024 By : Debdeep Gupta
Shares of L&T Technology Services tumbled almost three percent in trade on October 17, after the IT service firm's earnings show for the quarter ended September came in under expectations.
L&T Technology Services reported a marginal 1.91 percent increase in its net profit at Rs 319.6 crore in the September 2024 quarter. The company had reported a net profit of Rs 313.60 crore in the June quarter.
The total income increased to Rs 2637.9 crore in the reporting period from Rs 2427.7 crore a year ago. Sequentially, it had reported a total income of Rs 2524.1 crore in the first quarter of the current fiscal.
At 10.40 am, shares of LTTS trimmed a large portion of their losses to quote Rs 5,348.2 on the NSE, lower by 0.16 percent.
International brokerage Citi reiterated its sell call on the player, cutting its target price to Rs 4,860 from Rs 4,860 earlier.
The brokerage noted that while the revenue guidance was maintained, it's a tough ask rate for H2Y25. The management sounded confident that revenues and margins in Q3 will improve, despite wage hikes.
However, Citi said that the asking rate, even at the lower end, looks difficult to achieve despite better seasonality and deal wins.
On the other hand, Investec raised its target price on the IT firm from Rs 3,960 earlier, to Rs 4,980 per share. While L&T Tech reported weaker-than-expected revenue and margin performance, the firm appears to be delivering on the SWC integration, which was a cause of worry earlier.
As a result, Investec said it is maintaining faith in its estimates, even though this "appears to be a case of high risk and low reward."
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