LTTS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.4

📊 Core Financials & Profitability

Earnings & Growth: Quarterly PAT dipped slightly from ₹314 Cr to ₹308 Cr, but EPS remains strong at ₹115. ROE of 21.7% and ROCE of 27.9% reflect excellent capital efficiency.

Debt Profile: Debt-to-equity at 0.09 — nearly debt-free, which enhances financial stability.

Dividend Yield: 1.25% — moderate, with consistent payouts.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 38.3 Slightly above industry PE of 32.2 — premium valuation.

P/B Ratio ~8.09 Elevated relative to book value ₹543.

PEG Ratio 4.14 Indicates overvaluation relative to earnings growth.

🔍 Conclusion: LTTS is richly valued, with the PEG ratio suggesting growth is priced at a premium. However, strong fundamentals and high-quality earnings justify part of the premium.

🧠 Business Model & Competitive Edge

Core Operations: L&T Technology Services is a leading engineering R&D services provider, specializing in digital engineering, embedded systems, and industrial IoT.

Strategic Strengths

Strong client base across automotive, aerospace, telecom, and medical devices.

High-margin digital offerings and IP-led solutions.

Institutional confidence remains stable: DII holdings up 0.19%.

Growth Outlook

Analysts forecast an average target price of ₹4,555.84, implying ~8.7% upside from current levels

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Long-term upside potential ranges up to ₹5,770, with bullish sentiment from IDBI Capital and Sharekhan

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📉 Technicals & Entry Zone

RSI: 65.0 — slightly bullish, nearing overbought.

MACD: 8.08 — positive momentum.

DMA Levels: Price above 50-DMA but below 200-DMA — mixed signals.

📌 Suggested Entry Zone: ₹4,200–₹4,300 — near 50-DMA, offering a better margin of safety.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, sector leadership, and digital tailwinds support long-term compounding.

Buy on Dips: Prefer entry below ₹4,300, especially if RSI cools to 55 or lower.

Monitor: Client diversification, margin trends, and digital transformation contracts.

You can explore LTTS’s analyst targets and valuation reports or review its investor presentation schedule for deeper insights into upcoming strategic disclosures

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. Let me know if you'd like a peer comparison with Tata Elxsi or Persistent Systems next.

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trendlyne.com

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www.ltts.com

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