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LTTS - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.8
📊 Financial Overview
- Profitability: PAT remained stable QoQ at ₹307 Cr, with EPS at ₹116 and a modest profit variation of 4.85%.
- Return Metrics: ROE at 21.7% and ROCE at 27.9% indicate strong capital efficiency and operational performance.
- Valuation: P/E of 35.5 is slightly above the industry average (33.1), suggesting a premium valuation.
- P/B Ratio: With a book value of ₹545 and price of ₹4,122, P/B is ~7.56, reflecting a high valuation multiple.
- PEG Ratio: 3.83 signals overvaluation relative to earnings growth.
- Debt Profile: Debt-to-equity ratio of 0.10 shows excellent financial discipline and low leverage.
- Momentum: RSI at 42.7 and MACD at -20.6 suggest bearish sentiment and potential for technical correction.
🏢 Business Model & Competitive Edge
- L&T Technology Services (LTTS) is a leading engineering R&D services provider with expertise in digital engineering, embedded systems, and industrial IoT.
- Its diversified client base across transportation, telecom, medical devices, and industrial products offers resilience and scalability.
- Strong parentage from L&T Group and focus on high-margin digital transformation projects provide long-term strategic advantage.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹4,208) and DMA 200 (₹4,440), indicating a short-term downtrend.
- Suggested Entry Zone: ₹3,950–₹4,050 for accumulation on dips.
- Long-term holding is favorable given strong fundamentals and exposure to high-growth engineering services.
✅ Positive
- Strong ROE and ROCE reflect superior operational efficiency.
- Low debt-to-equity ratio supports financial resilience.
- DII holdings increased by 0.27%, showing rising domestic investor confidence.
⚠️ Limitation
- High P/B and PEG ratios suggest valuation caution.
- FII holdings declined by 0.17%, indicating cautious foreign sentiment.
- Momentum indicators suggest short-term weakness.
📉 Company Negative News
- Stock has corrected ~27% from its 52-week high of ₹5,647.
- MACD and RSI indicate bearish sentiment and weak momentum.
📈 Company Positive News
- Stable quarterly earnings and consistent EPS performance.
- Strategic wins in digital engineering and industrial automation gaining traction.
🏭 Industry
- Engineering R&D services benefit from global digital transformation and increased outsourcing by OEMs.
- Industry P/E of 33.1 supports moderate valuation for innovation-led players.
🧾 Conclusion
- LTTS is a high-quality engineering services firm with strong fundamentals and strategic positioning in digital transformation.
- Entry near ₹3,950–₹4,050 offers a favorable long-term opportunity.
- Monitor valuation metrics and institutional flows for sustained performance.
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