L&T Infotech gains 6% after Q2 net profit rises 27%
Its revenue grew 16.6% to ₹2,998.4 crore in the quarter amid better pricing, utilization, and off-shore mix
MUMBAI: L&T Infotech (LTI) shares gained as much as 6% on Wednesday after the company reported a 26.7% year-on-year increase in consolidated net profit to ₹456.8 crore for the quarter ended September.
At 02:15 pm, LTI stock was at ₹3067.15, up 3.5% from its previous close, while the benchmark index, Sensex lost 0.70% to 40260.87.
Its revenue grew 16.6% to ₹2,998.4 crore in the reported quarter. Sequentially, the net profit was up 9.7%, while the topline rose 1.7%. In constant currency terms, revenue increased 2.3% quarter-on-quarter and 10.5% year-on-year. The results were declared aftermarket hours on Tuesday.
Better pricing, utilization, and off-shore mix drove robust improvement of 250 basis points (bp) QoQ / 440bp YoY in the EBIT (earnings before interest tax) margin to 19.9 per cent.
Analysts gave a thumbs up to the numbers. HDFC Securities said in a post result note that that the positive outlook is premised on stronger large deal wins, and strong large deal pipeline, and acceleration of cloud migration.
The company also won large deal with net new total contract value (TCV) in excess of US$40 million in analytics. The company's large deal pipeline remains strong. LTI is seeing increased traction in digital, cloud and analytics space.
“LTI’s valuation premium to peers reflects its growth/margin/return metrics outperformance versus peers. Our target price of ₹3,065 is based on 22 times September 2022E earnings per share" added HDFC Securities. The brokerage has ‘add’ rating on the stock.
The board of directors declared an interim dividend of ₹15 per equity share. The board also approved a scheme of arrangement for merger of Syncordis Software Services India and Ruletronics Systems with the company.
LTI is a global technology consulting and digital solutions company with operations in 31 countries, to accelerate their digital transformation with LTI’s Mosaic platform enabling their mobile, social, analytics, IoT and cloud journeys
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