January 17, 2023
New Delhi, India
Market Resilience Amidst Soft Q3 Numbers
In a surprising turn of events, L&T Technology Services witnessed a 3.5% surge in its share price during Wednesday’s trading session, defying expectations following the announcement of soft Q3FY24 results. The company, although falling short of Street estimates, maintained its growth guidance for FY24 at 17.5–18.5%, hinting at a potentially robust Q4, as highlighted by brokerage Nuvama Institutional Equities.
Positive Signals for Q4
Analysts at Nuvama Institutional Equities expressed confidence in a strong Q4 for L&T Tech, citing enhanced revenue visibility and an anticipated uptick in target multiple. The company’s management appears optimistic about overcoming the Q3 setback, attributing part of the expected recovery to seasonality factors.
Market Analysts’ Upgrades and Recommendations
In response to the enhanced revenue visibility, Nuvama Institutional Equities revised their forecasts for FY24E/25E/26E and increased the target multiple to 35x FY26E PE. The brokerage went a step further by upgrading L&T Technology Services’ stock to a ‘BUY,’ setting a target price of ₹6,260, up from the previous ₹5,200.
Technical Analysis Signals Positive Momentum
Equity Technical and Derivative Analyst, Rajesh Bhosale of Angel One, emphasized the positive technical indicators for L&T Tech. After two days of profit booking, the stock has initiated a positive move, supported by above-average volume in the first hour of trading. Bhosale predicts a continuation of the positive momentum, with potential price targets at ₹5,650, while ₹5,300 is expected to act as a support level.
Investor Takeaway: A Balancing Act
Despite the soft Q3, the market’s reaction to L&T Technology Services suggests resilience and confidence in the company’s future prospects. Investors should weigh the positive Q4 outlook and increased revenue visibility against the Q3 performance, keeping in mind the upgraded recommendations from analysts.
Check All Q3 Results
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