L&T Infotech set to head higher on growth rate, return ratios

Mumbai: L&T Infotech (LTI), which has lately acquired a more pronounced digital accent than several of its bigger fancied rivals, could climb as much as a fifth in a year due to large order wins, operational efficiency, and higher offshore revenues.LTI has posted a three-year CAGR of 18.7% in sales and 16.7% in net profits, the highest among top seven Indian software firms. It has a good return on equity (ROE) track record — of 31.8% in three years: That’s next only to TCS, India’s second-most valuable firm.“LTI has held its ground in an industry affected by transitional and macro headwinds; and resilience has been underpinned by superior execution, higher digital penetration and prudent strategy of targeting niche segments within verticals,” said Sandip Agarwal, analyst, Edelweiss Securities. 78816191Although the stock has almost doubled in the past year, analysts believe the valuation premium will continue on account of strong and stable growth. “LTI has deep domain capabilities and its low exposure to segments that faced headwinds should be favourable in the current context,” said Mukul Garg, analyst, Motilal Oswal Financial Services. LTI’s September quarter margins surprised positively, with EBIT margins increasing by 250 bps sequentially to 19.9%, the highest ever in the company’s listed history.

from Economic Times https://ift.tt/3krXgti