LTTS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | LTTS | Market Cap | 39,969 Cr. | Current Price | 3,768 ₹ | High / Low | 5,647 ₹ |
| Stock P/E | 32.1 | Book Value | 545 ₹ | Dividend Yield | 1.46 % | ROCE | 27.9 % |
| ROE | 21.7 % | Face Value | 2.00 ₹ | DMA 50 | 4,192 ₹ | DMA 200 | 4,361 ₹ |
| Chg in FII Hold | -0.45 % | Chg in DII Hold | 0.44 % | PAT Qtr | 314 Cr. | PAT Prev Qtr | 307 Cr. |
| RSI | 30.6 | MACD | -179 | Volume | 36,312 | Avg Vol 1Wk | 53,714 |
| Low price | 3,700 ₹ | High price | 5,647 ₹ | PEG Ratio | 3.47 | Debt to equity | 0.10 |
| 52w Index | 3.51 % | Qtr Profit Var | 4.54 % | EPS | 115 ₹ | Industry PE | 25.7 |
📊 Financials: LTTS demonstrates strong fundamentals with ROCE at 27.9% and ROE at 21.7%, reflecting excellent capital efficiency. Debt-to-equity ratio of 0.10 indicates negligible leverage, ensuring financial stability. Quarterly PAT improved from 307 Cr. to 314 Cr. (+4.54%), showing steady earnings growth. Cash flows remain healthy, supported by consistent profitability and operational efficiency.
💹 Valuation: Current P/E of 32.1 is higher than industry average (25.7), suggesting premium valuation. P/B ratio (~6.9) is elevated, while PEG ratio of 3.47 indicates expensive growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 3,700–3,800 ₹, offering margin of safety compared to current price (3,768 ₹).
🏢 Business Model & Advantage: LTTS operates in engineering and R&D services, serving industries such as automotive, aerospace, industrial, and telecom. Its competitive advantage lies in niche expertise, global client base, and strong innovation capabilities. Market cap of 39,969 Cr. positions it as a large-cap IT services player with resilience and growth potential.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 3,700–3,800 ₹. Long-term investors may hold given strong fundamentals, negligible debt, and sector tailwinds. Technical indicators (RSI 30.6, MACD negative) show near-term weakness, but long-term outlook remains positive due to demand in engineering services.
Positive
- High ROCE (27.9%) and ROE (21.7%) highlight superior efficiency.
- Debt-to-equity ratio of 0.10 ensures strong balance sheet.
- Quarterly PAT growth (+4.54%) indicates earnings momentum.
- DII holding increased (+0.44%), showing domestic institutional confidence.
- Strong positioning in engineering and R&D services with global clientele.
Limitation
- High P/E (32.1) compared to industry average (25.7) suggests overvaluation.
- Elevated P/B ratio (~6.9) indicates expensive price relative to book value.
- PEG ratio (3.47) reflects weak growth-adjusted valuation.
- Dividend yield of 1.46% is modest, limiting income appeal.
- Stock trading below DMA 50 (4,192 ₹) and DMA 200 (4,361 ₹) signals bearish trend.
Company Negative News
- Decline in FII holding (-0.45%) reflects reduced foreign investor confidence.
- Weak technical indicators (RSI 30.6, MACD -179) show bearish momentum.
Company Positive News
- DII inflows (+0.44%) show strong domestic institutional support.
- Quarterly PAT growth from 307 Cr. to 314 Cr. highlights earnings resilience.
Industry
- Industry P/E at 25.7 indicates moderate valuation levels.
- Engineering and R&D services benefit from global outsourcing demand.
- Companies with niche expertise and diversified client base hold competitive advantage.
Conclusion
⚖️ LTTS demonstrates robust fundamentals with excellent return metrics, negligible debt, and steady earnings growth. Despite premium valuation and weak PEG ratio, the company remains a resilient player in engineering services. Entry around 3,700–3,800 ₹ is recommended for long-term investors, with cautious monitoring of technical trends and institutional flows.