L&T Technology Services Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
It's been a pretty great week for L&T Technology Services Limited (NSE:LTTS) shareholders, with its shares surging 11% to ₹3,996 in the week since its latest second-quarter results. Revenues were ₹30b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at ₹51.61, an impressive 54% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from L&T Technology Services' 31 analysts is for revenues of ₹122.4b in 2027. This reflects a reasonable 6.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 19% to ₹150. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹121.6b and earnings per share (EPS) of ₹143 in 2027. So the consensus seems to have become somewhat more optimistic on L&T Technology Services' earnings potential following these results.
Check out our latest analysis for L&T Technology Services
The consensus price target rose 5.2% to ₹3,764, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic L&T Technology Services analyst has a price target of ₹4,350 per share, while the most pessimistic values it at ₹2,950. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the L&T Technology Services' past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of L&T Technology Services'historical trends, as the 12% annualised revenue growth to the end of 2027 is roughly in line with the 13% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 12% per year. So although L&T Technology Services is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around L&T Technology Services' earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for L&T Technology Services going out to 2029, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with L&T Technology Services , and understanding this should be part of your investment process.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.