Here are all the brokerage Reviews and Recommendations of
L&T Infotech IPO Public Issue.
Centrum VP of Research, Siddarth Khemka Said,
At the higher price band of RS 710, the issue is valued at 11.4x EV/EBITDA and 13.1x P/E on FY16 basis. This is similar to other mid-sized IT companies like HCL Tech (EV/E of 11.8x and P/E 13.7x), Tech Mahindra (EV/E 9.6x and P/E 15.6x), Mindtree (EV/E 12.8x and P/E 19.9x). LTIL is similar to mid-sized IT firms as apart from superior return ratios, other financial metrics are comparable. Its operating margins at 17.7% are in line with peers (TechM 16.6%, Mindtree 17.7%, HCL Tech at 21.5%). Also, during FY16 LTIL had a forex gain of 280 crore (due to favourable hedges) boosting PAT. We believe that the stock may not command superior valuations and post listing price performance would be dependent on the overall growth in the IT sector.
Aditya Birla Money Analysts said,
At the higher price band of `710, the stock is valued at ~2x and ~13x of its FY16 sales and earnings respectively, which is at a sharp discount to its listed peers. Given a) strong management background, b) established brand, and c) strong growth statistics and return profile, we recommend “Subscribe” on L&T Infotech Ltd for the medium term prospects it reflects, in a an industry which has started to struggle for growth.
Destimoney Research said,
At upper price band, the stock is available at reasonable discount as compared to its peers. Investors seeking exposure to mid-size IT company can SUBSCRIBE to the IPO at CUT OFF.
Urmil Shah of IDBI Capital Said,
At the top-end of the IPO price band of Rs710, L&T Infotech’s implied FY16 PER is 13x. Adjusted for the FX gain, the implied FY16 PER is 17x. We believe that the valuation is reasonable compared to 18x that of Mindtree and 14x-15x for large-caps like Wipro, HCL Technologies and Tech Mahindra. L&T Infotech’s reasonable valuation is the key reason for our recommendation. However, we believe that its undifferentiated business model would limit any substantial re-rating in the near term. M&A would be an upside trigger as
discussed above.
Reliance Securities Analyst Harit Shah said,
Thus, we believe the promoters have left something on the table for the investors in terms of valuations, which we view as a major positive factor in favour of the IPO. We recommend SUBSCRIBE to the IPO on the back of scale, redoubtable parentage, high return ratios and reasonable valuation.
BP Wealth Management in a Research Note said,
At the upper end of the price band Rs 710, L&T Infotech is available at 12.7x to its FY16 earnings, which is at a discount to its domestic peers. We are positive on the company’s outlook and cross selling opportunities through Larsen & Turbo. Management stated that it is targeting to double its revenues in the next three to four years through acquisitions and organic growth. The company has a good growth opportunity and we recommend our investors to SUBSCRIBE this issue with the long term time horizon.
Ashika Research Analyst Paras Said,
At the higher price band, the company is valued at P/E of 11.3x FY17E EPS of Rs. 62.9 (expecting 12% growth rate) and we believe it is relatively cheap compared to its peers. We expect that the pricing of the issue and considering the pedigree of the management and strong ROE, the stock has the potential to trade at higher PE multiple compared to its peers. Moreover, a discount of Rs 10 per share for retail investors makes the deal even sweeter. We thus advice our investors to ‘SUBSCRIBE’ for the issue from a long term perspective.
Gupta Equities Research Desk said,
L&T Infotech Ltd. stands to gain from operating leverage and also rise Stability from international economic advantages. At a P/E of 12.4x we believe that L&T a discount to its domestic peers. We assign a Subscribe rating to the IPO.
Sharekhan REsearch Note said,
At a price band of Rs705-710, the L&T Infotech IPO is priced at 13-13.1x its FY2016 consolidated earnings per share (EPS) of Rs54.3. The company’s valuation at the offer price looks attractive, given its strong parentage, healthy return ratios and high dividend payout. Continued traction in the key verticals like BFSI and improvement in the energy vertical, coupled with stronger growth in the digital and IMS space will be key earnings drivers for the company going forward.
Ajcon Analyst Akash Jain said,
At the upper end of the price band of Rs. 710, the IPO is valued at 12.6x at FY16 Post issue P/E which is cheap as compared to its immediate peers. With due consideration to factors like a)strong domain focus enabling Business to-IT Connect, b)strong parentage and brand equity of the Promoter, c) established long – term relationships with its clients, d) extensive portfolio of IT services and solutions, focus on emerging technologies, e) track record of established processes and executing large, end to end, mission critical projects, f) conducive work environment to attrat and retain talent, g) track record of strong financial performance, h) lean balance sheet with virtually no debt, i)robust ROE of 45%, j) no Brexit impact, we recommend investors to “SUBSCRIBE” the issue.
SPA Securities Analyst Deepak Tewary said,
L&T Infotech (LTI) is among the top 20 IT services providers in the world. We believe that there is significant growth potential for LTI given its diverse presence across all business verticals, focus on emerging technologies, established long term relationships with its clients, strong clientele and parentage & brand equity of the promoter. Further, management's guidance to double its revenue in next 3-4 years, largely through inorganic route, provides revenue visibility. LTI is available at a multiple of 12.9x based on FY16 earnings, which is at discount to its peers, MphasiS (17.7x) and Mindtree (18.9x). We recommend investors to SUBSCRIBE to the issue for long term gains.
Angel Broking Analyst Sarabjit Kour Nangra Said,
LTI has reported a strong CAGR of 20.1% and 23.1% on the revenue and net profit fronts respectively over FY2011-2015. At `710, which is the upper end of the offer price band, the company is available at ~13x its FY2016E earnings, which is at a slight discount to its mid-cap peers trading at an average PE of ~15x FY2016E earnings. Plus, assuming that the company maintains its historical average rate of dividend payouts, it would translate into a yield of 4-5% for the investor. Apart from the favorable prospects of the company, we also foresee decent gains on listing. Thus, we recommend a SUBSCRIBE to the issue.
