Technology stock

L&t Technology Stock Jumps 4% on Strong FY25 Growth Outlook

Shares of L&T Technology Ltd rose 4% on the NSE on Friday, hitting a new 52-week high of 4,145, following management’s robust growth outlook.

At its recent analyst day, the company’s management said it was aiming to achieve $1.5 billion in FY25 revenue, along with an 18% Ebit margin. Ebit is short for Earnings Before Interest and Taxes.

The company’s management hopes to benefit from increased digitalization which leads to an acceleration of expenditure on ER&D (engineering and research and development). According to management, the industry’s overall R&D spending is expected to grow from $1.4 trillion in calendar year 2020 to $1.7-1.9 trillion by calendar year 2023.

In addition, L&T Technology has focused more on scaling large accounts as well as large transactions, which will drive growth. Management sees room for margin improvement, thanks to a further move offshore.

In addition, management has highlighted six key areas of business investment where it sees significant growth opportunities. These include electric, autonomous and connected vehicles, medical technologies, 5G, artificial intelligence and digital products, digital manufacturing and sustainability.

Motilal Oswal Financial Services Ltd analysts said the company’s FY25 guidance implies a FY21-25 US dollar revenue CAGR of around 20% and indicates high management confidence in both in the demand environment and in its ability to gain share in all key verticals.

“Furthermore, he reiterated his aim to keep his targets achievable, despite customer and attrition risks. We see this as an indication that there may also be potential upside risk to his aspiration to 1 $.5 billion in revenue by FY25,” Motilal said. Oswal report.

The national brokerage expects L&T Technology to see strong revenue growth over the next few years.

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