Rs 17/Share Dividend: IT Stock L&T Technology Sets Record Date; Buy?

L&T Technology Services announced its financial results and interim dividend for the quarter ended September 30. A listed subsidiary of Larsen & Toubro Limited, L&T Technology Services Limited (LTTS) specialises in engineering and research and development (ER&D) services. Check out the results and dividend announcement for its Q2FY24 here.

L&T Technology Services Dividend

"The Board of Directors have also declared an Interim Dividend of Rs. 17/- per equity share. The Interim Dividend shall be paid to equity shareholders of the Company whose names will appear in the Register of Members or in the records of the Depositories as Beneficial Owners of Equity shares as on Friday, October 27, 2023, which is the Record Date fixed for the aforesaid purpose," said L&T Technology Services in a stock exchange filing.

L&T Technology Services Q2 Results

In the September quarter, the company's net profit climbed by 5% to Rs 315.4 crore from Rs 300 crore in the same quarter last year. Its revenue jumped by 4.6% YoY to Rs 2,386.5 crore in Q2FY24 from Rs 2,281.7 crore in Q2FY23. The management has lowered its 20 per cent YoY revenue growth prediction for FY24 to 17.5-18.5 per cent. L&T Technology's revenue grew by 2.9% sequentially to $288.1 million in dollar terms. It climbed sequentially by 3.2% in constant currency terms. Seven projects totalling USD 10 million or more TCV were won by LTTS during the quarter across all industrial categories, including six deals worth over USD 15 million apiece. LTTS has resulted in a 23,880 employee base as of the end of Q2FY24.

"We had a strong performance with revenue growing by 3.2% sequentially in constant currency and operating margin sustaining at 17% plus levels even as we absorbed wage hikes for our employees. Deal momentum was strong with the highlight being a USD 10 million plus deal win leveraging SWC capabilities in North America. This win has been the result of having a superior end-to-end technology stack for wireless and 5G communications which is becoming a key differentiator for us," said Amit Chadha, CEO & Managing Director, L&T Technology Services Limited.

"We are investing in software defined vehicles, AI and cybersecurity and will have close to 2,000 employees trained over the next few quarters. Our collaboration with hyperscalers and chip companies is helping us develop AI solutions and services that address needs of industries like Auto, Manufacturing and Medical. We are optimistic that such investments will strengthen our position as the engineering partner of choice for global ER&D companies," said Amit Chadha.

L&T Technology Services Share Price Target

Ameya Ranadive, Equity Research Analyst at Choice Broking said, LTTS is currently trading at 4460, reflecting a modest correction of 3% subsequent to the release of its recent results. The stock exhibits a notable demand zone ranging from 4300 to 4600, which has historically proven to be a pivotal resistance level during its upward trajectories.

"This correction, coupled with the discernible RSI divergence observed on the charts, suggests a possible phase of profit booking. Moreover, the breakdown of both the 20 and 50-day exponential moving averages in the IT sector indicates a discernible short-term weakness in the stock. In view of these technical signals, it would be judicious to consider a buy-on-dips strategy for LTTS. On a weekly chart, LTTS is poised to retest its previous breakout levels, further emphasizing the potential for a renewed upward momentum. The RSI currently stands at 66, signifying a moderately bullish sentiment, the analyst of Choice Broking said.

Ameya Ranadive went on to add "Looking ahead, it is worth noting that a substantial resistance level lies at 4750. Should this level be breached, it could pave the way for a considerable rebound in the mid-term. In fact, upon surpassing the resistance at 4750, there is a plausible scenario wherein LTTS may target the 5100 mark."

Disclaimer

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