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LTTS - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 20 Dec 25, 11:15 pm
Back to Fundamental ListFundamental Rating: 4.2
| Stock Code | LTTS | Market Cap | 47,812 Cr. | Current Price | 4,511 ₹ | High / Low | 5,647 ₹ |
| Stock P/E | 38.9 | Book Value | 545 ₹ | Dividend Yield | 1.19 % | ROCE | 27.9 % |
| ROE | 21.7 % | Face Value | 2.00 ₹ | DMA 50 | 4,369 ₹ | DMA 200 | 4,420 ₹ |
| Chg in FII Hold | -0.17 % | Chg in DII Hold | 0.27 % | PAT Qtr | 307 Cr. | PAT Prev Qtr | 308 Cr. |
| RSI | 56.6 | MACD | 88.9 | Volume | 68,912 | Avg Vol 1Wk | 47,912 |
| Low price | 3,855 ₹ | High price | 5,647 ₹ | PEG Ratio | 4.20 | Debt to equity | 0.10 |
| 52w Index | 36.6 % | Qtr Profit Var | 4.85 % | EPS | 116 ₹ | Industry PE | 31.6 |
📊 Core Financials
- Quarterly PAT stable at ₹307 Cr. vs ₹308 Cr. (flat performance, +4.85% variation YoY).
- ROCE at 27.9% and ROE at 21.7% indicate strong operational efficiency and shareholder returns.
- Debt-to-equity ratio at 0.10 shows negligible leverage and robust balance sheet health.
- EPS at ₹116 supports profitability, reflecting strong earnings power.
💹 Valuation Indicators
- P/E Ratio: 38.9 (above industry PE of 31.6, suggesting premium valuation).
- P/B Ratio: ~8.3 (CMP ₹4,511 / Book Value ₹545).
- PEG Ratio: 4.20 (high, indicating stretched valuation relative to growth).
- Intrinsic Value: CMP appears above fair value, limited margin of safety.
🏢 Business Model & Competitive Advantage
- L&T Technology Services (LTTS) operates in engineering R&D services across industries like transportation, telecom, industrial, and medical devices.
- Competitive advantage lies in domain expertise, global client base, and strong parentage (L&T Group).
- Focus on digital engineering, AI, and sustainability solutions enhances long-term growth prospects.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive near ₹4,000–₹4,200 (close to DMA 200 at ₹4,420 and 52-week low ₹3,855).
- Long-Term Holding: Suitable for investors seeking exposure to engineering R&D growth, though valuations are premium.
✅ Positive
- Strong ROCE (27.9%) and ROE (21.7%) highlight efficiency.
- Low debt-to-equity ratio (0.10) ensures financial stability.
- DII holdings increased (+0.27%), reflecting domestic investor confidence.
- EPS of ₹116 supports strong profitability.
⚠️ Limitation
- High P/E (38.9) compared to industry average (31.6).
- PEG ratio at 4.20 indicates stretched valuation relative to growth.
- Quarterly PAT flat, showing limited near-term earnings momentum.
📉 Company Negative News
- FII holdings reduced (-0.17%), showing cautious foreign sentiment.
- Stock trading below recent highs, reflecting valuation pressure.
📈 Company Positive News
- Quarterly PAT stable at ₹307 Cr., maintaining profitability.
- DII holdings increased, showing strong domestic support.
- Strong demand outlook in engineering R&D services globally.
🏭 Industry
- Engineering R&D services industry benefits from digital transformation, AI adoption, and global outsourcing.
- Industry PE at 31.6, showing LTTS trades at a premium to peers.
🔎 Conclusion
L&T Technology Services demonstrates strong fundamentals with high ROCE, low debt, and consistent profitability. However, valuations are stretched with a high P/E and PEG ratio. Entry is advisable near ₹4,000–₹4,200 for better risk-reward. Long-term investors may benefit from global demand for engineering R&D services, though cautious accumulation is recommended due to premium valuations and flat near-term earnings growth.
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