L&T Technology Services is one of the best performing IT stock and also most expensive. This stock has gone up more than 100 percent in the last year. Looking at the valuations in forward multiple FY22, it is trading at over 30 times. So it is more expensive than the likes of Tata Consultancy Services (TCS) as well.
What will the street watch?
One, whether they can achieve their FY21 guidance. The company had guided for 6.5 percent drop in revenues in FY21 and they also said that this quarter’s revenues and margins will be the same as Q4 of FY20.
Second, the street will watch their outlook and FY22 guidance. On revenues, CLSA expects growth to about 14 percent. So something plus or minus around that will be tracked very closely.
Third, previously the company had indicated that their EBIT margin guidance is close to 17 percent. How soon can they achieve it considering that supply pressures are rising, attrition is going up in the industry and higher wage hikes perhaps could kick in for the industry this year, so that will also be crucial to track.
Watch the accompanying video of CNBC-TV18’s Reema Tendulkar for more details