Research on L&T technology service ltd.

(Sector-1) Mid cap

L&T technology services is global leader in engineering and R&D services. LTTS expertise in
engineering design, product development, smart manufacturing and digitisation. Current P/E
ratio of company is 20.29 which is higher than industry P/E ratio which is 18.44 which shows
that share price is overpriced but the company will grow at higher pace. P/BV ratio is greater
than 1 i.e. 6.46 and EV/EBITDA ratio is 15.94 which is high that means it is fast growing
company. Return on equity is 28.94 which is still higher indicates that high investment return on
stock. Current ratio is 2.90 higher than 1 shows that company's day to day operation will not
get affected by working capital issue. Asset turnover ratio is 146.09 indicates that the company
is generating more revenue per rupee spent on asset. The company's dividend yield is 1.41. The
recent news about company is L&T technology services recognized as a leader among IoT
services provider. Plus point is share value of L&T technology services is increasing.

Management:-
L&T technology services ltd. Key product/revenue segment include service which contributed
Rs. 4712 crore to sales value for the year ending 31st march, 2019. For the quarter ended 30th
November, 2019,the company has reported a consolidated sales of Rs. 1402 crore, up 4.05%
from last quarter sales of Rs 1347.50 crore and up 10.74% from last year same quarter sales of
Rs. 1266 crore. Company has reported net profit after tax of Rs 206.60 crore in lastest quarter.
The company top management includes Dr. Keshab panda, Mr. A. M. Naik, Mr. Abhishek sinha,
Mr. Amit chadha, Mr. Arjun gupta, Mr. Narayanan kumar, Mr. S N subramanyam, Mr samir
desai, Mr sudip banerjee, Ms apporva purohit.
Company has sharp and tannan as it’s auditor as on 30-09-10, the company has a total of
104,022,110 shares outstanding.

Swot analysis:
Strength:
Strong Brand Name in construction and manufacturing in India: L&T has a strong brand name in
India in the field of construction and manufacturing which enhances its trust on its clients. L&T
has handled various large scale projects in India and has successfully created a trustworthy
brand name which is very important especially in the construction industry.
Competitive advantage: L&T is one of the most respected companies in India for engineering
for its custom made technology-intensive equipment and systems. With the strong brand name
and strong manufacturing facilities, L&T holds a competitive advantage.

Technical expertise: L&T’s technological capabilities support its design and manufacturing

capabilities and provide an expertise in engineering and project management. L&T’s Technical
expertise provides a competitive advantage to the company.

Weakness:

Dependence on Indian market: Indian market contributes over 65% of its total revenues and
thus makes L&T largely dependent on the Indian market. Overdependence on a particular
market makes the company vulnerable to any fluctuations in the Indian market.
Increasing debt: L&T’s debts have been increasing steadily for the past few years. L&T’s debt
has increased from INR 98960 million in FY2011 to INR 136090 in FY2016. Increasing debts
impact company’s financial flexibility.
Opportunity:
Growth in Indian construction and engineering industry: The Indian construction and
engineering industry grew by 8% year on year. With expected high government and private
spending on infrastructure in the next 10 years on smart cities, metro projects etc. L&T is well
placed to leverage the opportunity created in the industry.

Strong order book position: L&T has won various contracts in the recent past and secured new
orders worth more than $20000 million in the year 2015-16 which showed a growth of over 7%
over the year.

Threats:
Extensive environmental regulations: L&T is subject to follow extensive environmental
regulations relating to health, pollution, waste disposal etc. These regulations increase
compliance cost for the company.

Low Oil prices affect the industry: With oil prices decreasing, various drilling projects have been
stopped and expansion plans have been scaled back. This affects growth opportunity for the
company and the industry.

GST impact can be negative: The cost of under construction buildings are expected to increase
with GST and it will have an overall negative impact on the construction industry.
Competitors:

Infosys is LTTS's biggest rival. Infosys was founded in 1981, and is headquartered in Bangalore,
Karnataka. Like LTTS, Infosys also works within the IT Services sector. Infosys generates $11.4B
more revenue vs. LTTS.
TCS is one of LTTS's top competitors. TCS's headquarters is in Mumbai, Maharashtra, and was
founded in 1968. Like LTTS, TCS also works within the IT Services sector. TCS generates 3,184%
of LTTS's revenue.
CTS is seen as one of LTTS's top competitors. CTS is a Public company that was founded in 1994
in Teaneck, New Jersey. CTS operates in the IT Consulting industry. Compared to LTTS, CTS has
268,519 more employees.