L&T Infotech extends fall post Q4 results; stock slips 15% in three days

In Q4FY22, EBIT margin moderated by 60 basis points (bp) QoQ and 210 bps YoY to 17.3 per cent due to lower working days and revenue mix

Shares of Larsen & Toubro (L&T) Infotech continued their downward trend after they slipped 6 per cent to Rs 5,143 on the BSE in Wednesday's intra-day trade after the company reported revenue growth of 3.6 per cent quarter-on-quarter (QoQ) in constant currency (CC) terms on a high base. Meanwhile, earnings before interest and tax (EBIT) margin moderated by 60 basis points (bp) QoQ and 210 bps YoY to 17.3 per cent in Q4FY22 due to lower working days and revenue mix.

The stock of the L&T Group software & consulting company has plunged 15 per cent in the past three trading days. In comparison, the S&P BSE Sensex was up 0.84 per cent at 56,938 points at 12:17 pm. The stock had hit a 52-week high of Rs 7,595.25 on January 4, 2022.

"L&T Infotech continues to benefit from one of the strongest ever demand environments and sees it continuing over the next three-to-five years. The management reassured of industry-leading growth in FY23 as demand remains strong. It doesn't see any postponement in demand, despite a volatile macro environment and geopolitical issues. L&T Infotech is one of the best placed companies in our coverage universe, with a strong client mining ability," Motilal Oswal Financial Services said in a result update.

While we remain confident of the management's execution capabilities, we remain on the sidelines in the stock led by a significant valuation re-rating, the brokerage firm said with a "neutral" rating on the stock.

Meanwhile, according to a media report, the boards of L&T Infotech and Mindtree, two software units controlled by the Mumbai-based engineering firm, could consider share swap ratios for the merger.

"Needless to mention, as and when there is any specific information to be disclosed under the listing regulations, the Company will provide the same t o the stock exchanges as a part of our compliance protocol," L&T Infotech had said on Monday, April 18, 2022 on clarification/confirmation on news item appearing in media/publication.

L&T acquired control of Mindtree in 2019. The conglomerate holds a 60.99 per cent stake in the company, and has 74.05 per cent of L&T Infotech.