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INVESTMENT INSIGHTS

Check Before You Invest : L&T Technology Services Ltd

BSE: 540115 NSE: LTTS ISIN: INE010V01017
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does L&T Technology Services Ltd belong to?
L&T Technology Services Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is L&T Technology Services Ltd a good quality company?
L&T Technology Services Ltd is a good quality company, based on a consistently good 10-year financial track record.
Q.3 Is L&T Technology Services Ltd undervalued or overvalued?
L&T Technology Services Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is L&T Technology Services Ltd a good buy now?
L&T Technology Services Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of L&T Technology Services Ltd?
L&T Technology Services Ltd revenue growth is 10.6% for FY-2025, which is below its 5-year CAGR of 13.68%, indicating slower growth.
Q.2 Return on capital employed (ROCE) of L&T Technology Services Ltd?
L&T Technology Services Ltd Return on capital employed is 31.51% for FY-2025, which is below its 5-year historical median of 35.44%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 11.25%, indicating value creation.
Q.3 Return on Asset of L&T Technology Services Ltd?
L&T Technology Services Ltd Return on Asset is 13.95%, which is below its 5-year historical median of 15.68%, indicating deteriorated asset utilization efficiency.
Q.4 Return on Equity (ROE) of L&T Technology Services Ltd?
L&T Technology Services Ltd Return on equity is 22.52% for FY-2025, which is below its 5-year historical median of 25.32%, indicating the business is making worse use of its shareholders capital.
Q.5 Cash conversion cycle of L&T Technology Services Ltd?
L&T Technology Services Ltd Cash conversion cycle is 4 days, below its 5-year historical median of 30 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover 1.18 1.18
ROE 22.52 25.32
ROCE 31.51 35.44
Cash Conversion Cycle 4 days 30 days
Q.6 Gross Profit margin of L&T Technology Services Ltd?
L&T Technology Services Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.2% for FY-2025, which is below its 5-year median of 21.5%, indicating decreasing margins.
Q.7 Operating Profit Margin of L&T Technology Services Ltd?
L&T Technology Services Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.71% for FY-2025, which is below its 5-year median of 19.77% indicating decreasing margins.
Q.8 Net Profit Margin of L&T Technology Services Ltd?
L&T Technology Services Ltd Net Profit Margin is 11.84% for FY-2025, is below with its 5-year median of 13.54%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin 19.2 21.5
Operating Profit Margin 17.71 19.77
Net Profit Margin 11.84 13.54
Q.9 Debt to Equity ratio of L&T Technology Services Ltd?
L&T Technology Services Ltd Debt-to-Equity ratio is 0.00, which is lower with the industry average of 0.12, indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of L&T Technology Services Ltd?
L&T Technology Services Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of L&T Technology Services Ltd?
Promoters hold 73.57% of the L&T Technology Services Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of L&T Technology Services Ltd vs industry peers?
L&T Technology Services Ltd revenue CAGR is 13.68%, compared to the industry median CAGR of 18.62%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth 10.6 18.6
Gross Profit Growth -1.4 11.2
Operating Profit Growth -0.9 12.6
Net Profit Growth -3.2 9.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover 1.18 1.23
ROE 22.52 25.84
ROCE 31.51 32.8
Cash Conversion Cycle (days) 4.27 31

Valuation & price assessment

Q.1 Stock return of L&T Technology Services Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 7.57% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price
CAGR		 - 7.6% -0.1% -11.6%
Q.3 Valuation ratios of L&T Technology Services Ltd vs historical?
The current P/E is lower that its historical median.
Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 30.04 38.60 47.37
Price to Book 5.94 8.59 2.63
Price to Sales 3.5 5.11 4.79
EV to EBITDA 17.06 22.15 16.48

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4. Bajaj Finserv Ltd.
5. Ultratech Cement Ltd.
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