Mehabe score: 5 G Factor: 4 Piotski Score: 7 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 7.
Description
Larsen & Toubro Infotech offers extensive range of IT services like application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions and platform-based solutions to the clients i(Source : 202003 Annual Report Page No: 114)Site:LTIMain Symbol:LTI
Stock trades at 4420.0, above its 50dma 4010.61. It also trades above its 200dma 3611.25. The stock remains bullish on techicals
The 52 week high is at 4499.90 and the 52week low is at 2157.75
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has delivered good profit growth of 18.23% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 31.31%
– has been maintaining a healthy dividend payout of 33.45%
Weakness
– Stock is trading at 10.58 times its book value
Competition
– The industry trades at a mean P/E of 31.4x. L & T Infotech trades at the industry’s max P/E of 39.91x. LTI trades at a P/E of 39.9x
– Industry’s mean G-Factor is 3.6 while the mean Piotski score is 8.0. LTI has a G-Factor of 4 and Piotski scoreof 7.
– Average 1 month return for industry is 5.1%. The max 1- month return was given by Mindtree: a return of 10.62 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 3462.0 cr compared to Rs 2949.0 cr for period ended Jun 2020, a rise of 17.4%
Operating Profits reported at Rs 648.0 cr for period ended Jun 2021 vis-vis 592.0 for period ended Jun 2020 .
Operating Margins contracted -135.7 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 28.39 compared to Rs 31.2 for previous quarter ended Mar 2021 and Rs 23.92 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 12883.0 cr for period ended TTM vis-vis sales of Rs 12370.0 cr for the period ended Mar 2021, a growth of 4.0%. The 3 year sales cagr stood at 10.9%.
Net Profit reported at Rs 2016.0 cr for period ended TTM vis-vis sales of Rs 1936.0 cr for the period ended Mar 2021, rising 4.0%.
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 2400.0 cr for period ended Mar 2021 vis-vis Rs 1644.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 30.0% compared to 31.0% over the last 3 Years. – The stock has given a return of 102% on a 1 Year basis vis-vis a return of 34% over the last 3 Years. – The compounded sales growth on a TTM bassis is 14% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is 27% vis-vis a compounded profit growth of 20% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 13.07% vis-vis 13.55% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 7.91% vis-vis 7.89% for Mar 2021
Conclusion
– is almost debt free.
– has delivered good profit growth of 18.23% CAGR over last 5 years
– has a good return on equity (ROE) track record: 3 Years ROE 31.31%
– has been maintaining a healthy dividend payout of 33.45% – Stock is trading at 10.58 times its book value
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 4010.61 and is trading at 4420.0, thus bullish price action wise.
