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2 IT Stocks To Buy As Listed By Broking Firm Sharekhan
Broking firm Sharekhan has placed a buy call on the stocks of L&T Infotech and L&T Technology Services. Here are some of the reasons the brokerage has a buy call on these 2 stocks.
L&T Technology Services: Buy with a price target of Rs 6350
According to Sharekhan, L&T Technology Services reported strong constant currency revenue growth of 4.2% q-o-q and 19.5% y-o-y in a seasonally soft quarter, led by broad-based growth across verticals and geographies.
| Current market price | Target price | Gains % |
|---|---|---|
| Rs 4967 | Rs 6350 | 27.84% |
"Further, the company's EBIT expansion, record hiring, logo additions, large deal wins and healthy deal pipeline remained impressive. EBIT margins improved for the sixth consecutive quarter to 18.6%, which is 60 bps above our expectations, aided by operational efficiency initiatives (including pyramid rationalisation) and currency tailwinds, the brokerage has said.
L&T Technology Services: Profits in line
Net profit for L&T Technology Services came in at Rs 248.8 crore (up 8.2% q-o-q and 34% y-o-y) and was in line with our estimates, the brokerage said.
"The management maintained its annual USD revenue growth guidance to 19-20% despite strong growth (20.3% y-o-y) in 9MFY2022, which implies a sequential revenue growth of 1.4-4.7% for Q4FY2022. We expect margins to remain under pressure in the near term given higher discretionary expenses, supply-side concerns and skill-based premium," it noted.
The stock of L&T Technology Services was last seen trading at Rs 4967 on the NSE.
L&T Infotech: Buy the stock with a price target of Rs 8100
| Current market price | Target price | Gains % |
|---|---|---|
| Rs 6521 | Rs 8100 | 24.21 |
According to Sharekhan, L&T Infotech's scalable business model helps it to grow faster in a strong demand environment, with stable profitability.
"Strong demand was led by higher spends on cloud and digital transformation initiatives, spend on newer technologies and higher offshoring opportunities owing to a talent crunch," the brokerage has said.
L&T Infotech is well-placed to remain in the top quadrant of the industry in terms of revenue growth in the medium-term. "We maintain a Buy on L&T Infotech with a price target of Rs. 8,100 given its strength in core modernization capability, robust client base, and superior digital competencies. We expect revenue/EPS to clock 18%/21% CAGR over FY2022-24," the brokerage has said.
The stock of L&T Infotech was last seen trading at Rs 6521 in the NSE.
Disclaimer
Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. The author and is family do not hold shares in any of the above mentioned companies.
