Target: ₹3,765
Current Market Price (CMP): ₹3,449.10
L&T Technology Services (LTTS) announced its Q4FY26 revenue at $306 million, reflecting a 1.7 percent decrease quarter-on-quarter and a 0.3 percent increase year-on-year from continuing operations. This performance is attributed to a strategic portfolio rationalization, which included the divestment of the Smart World Cities (SWC) division, a loss-generating segment, and the withdrawal from $19 million in annualized low-margin contracts in Europe and West Asia.
The company’s EBIT margin improved by 40 basis points sequentially, reaching 15.2 percent, marking the second consecutive quarter of margin enhancement. This improvement is indicative of better revenue quality and operational efficiency.
Management has also updated its margin aspirations, now targeting a mid-16 percent EBIT margin by Q4FY27 or sooner, supported by the exit from SWC, favorable rupee depreciation, and efficiencies driven by artificial intelligence.
For the full fiscal year FY26, revenue from continuing operations totaled $1.23 billion, reflecting an annual growth of 8.3 percent. The total contract value (TCV) of large deals for the year rose by 40 percent to $855 million. Days Sales Outstanding (DSO) also improved significantly to 83 days in Q4, with management projecting a steady state range of 85-90 days going forward, a marked improvement from the 110-115 days prior to the exit from SWC.
Under its Lakshya 2031 initiative, LTTS aims for a compound annual growth rate (CAGR) of 13-15 percent in dollar revenue over the next five years, targeting EBIT margins of 16-17 percent. The company aspires to achieve mid-16 percent margins by Q4FY27, supported by six key technological investments. A HOLD rating is maintained, with a revised target price of ₹3,765, valuing the stock at 23.3 times FY28E earnings per share.
Published on April 23, 2026
