Larsen & Toubro Infotech - Q4FY21 First Cut - ICICI Direct

(CMP - Rs. 3847, MCap - Rs. 67,231 crore)

Larsen & Toubro Infotech (LTI) reported a healthy set of Q4FY21 numbers. The company's constant currency dollar revenues increased 4.4% QoQ (vs our estimate of 4.5% QoQ). However, EBITDA margins declined by 133 bps QoQ to 21.9% (above our estimate of 21.5%) mainly led by wage hikes and lower utilization (dipped by 190 bps QoQ). Digital (45.6% of revenues) grew 7.5% QoQ and 22.3% YoY. The growth in constant currency revenues was mainly driven by banking financial services (up 5.0% QoQ), manufacturing (5.0% QoQ), High-Tech, Media & Entertainment (up 15.8% QoQ), and others (up 8.0% QoQ). The growth in verticals was across except Energy & Utilities which was down by 5.3% QoQ. In terms of geographies growth was across geographies led by Rest of the World (up 17.5% QoQ) and Europe (up 7.2% QoQ). The company has also won two large deals with cumulative net new TCV of US$66 million.

Q4FY21 Earnings Summary

Constant currency (cc) revenues grew 4.4% QoQ and 7.1% YoY. Dollar revenues grew 4.6% QoQ to US$447.4 million, vs our expectations of 5.0% QoQ growth and US$449.2 million

Rupee revenues grew 3.7% QoQ to Rs. 3,269.4 crore (vs. our estimate of Rs. 3,274.6 crore)

EBITDA margin declines 133 bps QoQ to 21.9% mainly led by wage hike and lower utilization (dipped by 190 bps QoQ) partially offset by rationalization of SG&A expenses. However, the margins were above our expectation of 21.9%

Reported PAT came in at Rs. 545.7 crore (vs. our estimate Rs. 498.5 crore) mainly led by better performance at operating level and higher other income

The company has reported a strong revenues growth. In addition, the company has reported healthy margins. We expect this improving trajectory in revenues to continue in coming quarters. We would be revisiting our estimates and target price post the conference call tomorrow.

Shares of Larsen & Toubro Infotech Ltd was last trading in BSE at Rs.3847.3 as compared to the previous close of Rs. 3923.25. The total number of shares traded during the day was 8309 in over 1574 trades.

The stock hit an intraday high of Rs. 3940 and intraday low of 3839.05. The net turnover during the day was Rs. 32093904.

Source : Equity Bulls

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