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“BUY” This Large Cap IT Stock With A Target Price of Rs. 7,505: Edelweiss

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Shares of Larsen & Toubro Infotech Ltd are bullish by Edelweiss Broking Ltd, with a target price of Rs.7,505 and a 12-month time frame. The brokerage has made a buy call from the current market price of Rs. 6,606 and is anticipating the stock to reach its target price in the provided time frame.

 

The brokerage’s take on Larsen & Toubro Infotech Ltd

The brokerage’s take on Larsen & Toubro Infotech Ltd

Edelweiss Broking Ltd. in its research report has commented that "L&T Infotech (LTI) hosted Analyst Day 2021. Highlights: i) LTI noted that acceleration in digital adoption and secular demand has led to The Great Restructuring, new spend areas such as ESG & Cloud and The Great Resignation. ii) It is building next-gen capabilities & partnerships with key partners. iii) Focussing on the ESG road map 2030."

According to the research report "Management highlighted that demand trend continues to be robust and best-ever seen by the company. LTI is one of the key beneficiaries of the tech upcycle with its domain-level expertise and strong partnerships with hyperscalers. We reiterate the company would post top-quartile revenue growth, which reaffirms our conviction."

Key takeaways for future performance of Larsen & Toubro Infotech according to Edelweiss
 

Key takeaways for future performance of Larsen & Toubro Infotech according to Edelweiss

  • Six reasons that make LTI confident of emerging stronger are: Secular Demand, Investing in capabilities, Best Talent, Robust Sales & Marketing blueprint for continued growth, an enviable team and high-quality operational resilience.
  • LTI is building a world-class ecosystem as it got upgraded to top-tier partnerships with 80% of strategic partners, and on-boarding 9,000 start-ups on the NILE platform.
  • It is accelerating its leadership position through the highest level of partnerships with hyperscalers such as Azure, AWS and Google Cloud.
  • Management highlighted that the company is well-prepared to win the war on talent through expanded ecosystem, next-gen talent platform and globalisation.
  • LTI's Sales CHIP strategy's focus is on consolidating (and growing) existing areas of strength (C), Harvesting existing high-growth engines (H), Incubating new growth engines such as renewables (I) and Strategic programs (P).
  • LTI is committed to sustainable development through ESG road map 2030- carbon-neutral, increase renewable energy share by 50% and increase diversity & plantation programs.
Buy Larsen & Toubro Infotech With A Target Price of Rs.7,505

Buy Larsen & Toubro Infotech With A Target Price of Rs.7,505

The brokerage has claimed that "Management highlighted that acceleration in digital adoption precipitated by the pandemic has permanently reshaped the arc of enterprise evolution and marks the dawn of a new economic era. LTI is committed to seizing this opportunity and creating a new trajectory. It is confident of comfortably crossing the revenue milestone of USD2bn in FY22."

According to the bullish view of Edelweiss, "LTI is focussed on spending in newer areas like ESG, Cybersecurity, Digital, Data and Cloud. And we believe that LTI is on track to create immense shareholder value over the next 15 years. The stock is trading at 31.8x FY23E. We maintain 'BUY' with a TP of INR7,505 (40x Q4FY23E) based on strong growth prospects."

Disclaimer

Disclaimer

The stock has been picked from the brokerage report of Edelweiss Broking Limited. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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