L&T Technology Services Makes Good Debut

The subsidiary of engineering & construction giant Larsen and Toubro, L&T Technology Services, has made its stock debut at Rs 920 per share, up by 7 per cent over its issue price of Rs 860. The Rs 894-crore issue was opened for subscription during September 12-15 and was oversubscribed 2.52 times. Since July, it is the second company belonging to the L&T Group which hit the capital market with an IPO, after L&T Infotech that got listed on July 21. L&T Technology Services via its IPO offered to sell 10.4 million shares. The offer was separated into QIB portion of 5.2 million shares, non institutional portion of 1.56 million shares and retail portion of 3.64 million shares. The proceeds from the IPO has gone to the promoter shareholders. The promoter was eyeing to dilute shareholding in the company from present 100 per cent to 89.8 per cent. The IPO could not attract enormous investor interest against previous issues like RBL Bank, Dilip Buildcon and Advanced Enzyme.

The first half of the trading session saw, L&T Technology Services shares were trading 5.66 per cent higher at Rs. 908.70 apiece.

In FY16 the company disclosed USD revenue growth of 9.4 per cent because it consciously exited from low margin tail accounts. Although this resulted in loss of revenues yet it rose the margins by 180 bps Y-o-Y to 17 per cent. Q1FY17 has seen EBITDA margin of 18.6 per cent. Out of the total, 50.3 per cent of revenue in FY16 was received from the 3 sectors of process industry, industrial products, and medical devices. AM Naik , L&T Group Chairman of the company  has targeted 15 per cent rise in revenue to USD 525 million in the ongoing fiscal and USD 1 billion for the next three to four years through inorganic growth. He said that the company wants to increase revenue to USD 1 billion over the next three-four years, and will be looking forward to acquisitions with revenue worth USD 150-200 million to achieve the target.

On 23^nd Sept, LT share price opened at Rs. 1505.00 and was quoting above 0.22 per cent at Rs. 1503.03.  Throughout the entire trading session around 8,65,807 shares exchanged hands with a traded value of Rs. 13,061.48 against its average volume for 20 days which stands at 1318395. The scrip touched its 52-week high value at Rs. 1,615.00 on 27^th July ’16 whereas the 52 week low value stands at Rs. 1,016.05 on 12^th Feb ‘16.

For further details, refer to LT share price forecast.