(Rating: BUY, Rs4,950, Upside: 15.4%)
- Reported revenue of $470.2 mn with revenue growth at 5.1% QoQ in USD terms was slightly better than expected, led by the ramp up of Injazat deal. Growth was broad-based across verticals with softness in manufacturing as it declined by 6.7% QoQ. India business saw 20% QoQ decline in Revenue (impact of 2nd covid wave)
- EBIT margin declined by 300 bps QoQ to 16.4% (as per expectation) as it advanced its wage hike cycle by 1 quarter to Q1FY22 and there was absence of 1 time benefit of 80 bps in last quarter. EBIT declined by 10.2% QoQ in the quarter
- It acquired Cuelogic Technologies, a Digital Engineering and Outsourced Product Development company, during the quarter. Also announced special dividend of Rs 10/ share on completion of 5 years of listing
- It continues to benefit from strong demand environment as the strategy is to remain focused on growth while maintaining stable net profit margin of 14-15%. It is expected to manage near term margin pressure through improved employee pyramid and positive operating leverage. Its investments in cloud and data will continue to help it to ride the digitalization wave. We maintain BUY on the stock with revised target price of Rs 4,950
Shares of Larsen & Toubro Infotech Ltd was last trading in BSE at Rs.4381.3 as compared to the previous close of Rs. 4288. The total number of shares traded during the day was 69190 in over 6702 trades.
The stock hit an intraday high of Rs. 4465 and intraday low of 4218.25. The net turnover during the day was Rs. 301797051.