L&T Technology Services

Auto segment does well, but telecom and hitech disappoints

Jul 20, 2019 06:07 IST capital market

L&T Technology Services Limited (LTTS) is a listed subsidiary of Larsen & Toubro Limited focused on Engineering and R&D (ER&D) services. It offers consultancy, design, development and testing services across the product and process development life cycle. Its customer base includes Fortune 500 companies and the worlds top ER&D companies, across industrial products, medical devices, transportation, telecom & hi-tech, and the process industries.

q-o-q results

On sequential basis, L&T Technology Services saw flat consolidated sales at Rs 1347.50 crore for the quarter ended June 2019. OPM rose 180 basis points to 20.2% which took OP up 10% to Rs 272.70 crore.

Other income grew 68% to Rs 56.50 crore and interest cost soared from Rs 50 lakh to Rs 9.10 crore. As depreciation rose 57% to Rs 42.80 crore, PBT grew 9% to Rs 277.30 crore. Provision for tax grew 19% to Rs 73.20 crore, after which PAT went up 6% to Rs 204.10 crore.

Transportation continues to be major vertical followed by telecom and hitech, Industrial product, plant and engineering and medical segment.

Transportation accounted for 34.9% of sales and saw good qoq growth of 7.6% and yoy growth of 29.6%. This growth was on higher base of 7% qoq growth in Q4. Auto and aerospace segments did well. Large deals were won in autonomous, functional safety and telematics.

Telecom and Hitech had a tough quarter as sales fell by $ 7 million in Q1 qoq. This segment accounted for 22.3% of sales. Sales fell 13.8% qoq and fell 10.9% on yoy basis. This segment saw disruption in mobile supply chain from China. Semi conductor segment saw slackness due to problems between US and China.

y-o- y results

On y-o-y basis, sales were up 17% and OPM jumped 320 basis points. OP was up 39%. PBT grew 4% and PAT was up 3%.

FY 2019 results

In FY 2019, consolidated sales grew 36% to Rs 5078.30 crore. OPM rose 270 basis points to 18.0% which took OP up 59% to Rs 914.70 crore.

Other income grew 15% to Rs 222.80 crore and interest cost was down 21% to Rs 1.90 crore. As depreciation went up 17% to Rs 104.20 crore, PBT grew 52% to Rs 1031.40 crore. Provision for tax grew 54% to Rs 263.00 crore, after which PAT went up 52% to Rs 768.40 crore.

Valuation

The stock trades at Rs 1606.

L&T Technology Services: Consolidated results

 

1906 (3) 1903 (3) Var. (%) 1806 (3) Var. (%) 1903 (12) 1803 (12) Var. (%)
Sales 1347.50 1343.10 0 1152.2 17 5078.30 3747.10 36
OPM (%) 20.2 18.5 17.0 18.0 15.4
OP 272.70 248.10 10 196.10 39 914.70 575.60 59
Other inc. 56.50 33.70 68 98.20 -42 222.80 193.40 15
PBIDT 329.20 281.80 17 294.30 12 1137.50 769.00 48
Interest 9.10 0.50 1720 0.40 2175 1.90 2.40 -21
PBDT 320.10 281.30 14 293.90 9 1135.60 766.60 48
Dep. 42.80 27.30 57 26.00 65 104.20 88.80 17
PBT 277.30 254.00 9 267.90 4 1031.40 677.80 52
Tax 73.20 61.60 19 69.80 5 263.00 171.20 54
PAT 204.10 192.40 6 198.10 3 768.40 506.60 52
EPS (Rs)* 78.5 74.0 76.2 73.9 48.7
* Paid up equity capital is Rs 20.8 crore, Face value Rs 2
Figures in crore
Source: Capitaline Databases

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