Valuations may cap upsides for L&T Tech stock, no major triggers seen in Q3

While outlook remains strong, Q3 revenue growth was lower than Street estimates

The stock of L&T Technology Services (LTTS) was the biggest loser among the Nifty IT and Nifty Midcap 100 constituents, shedding 6.3 per cent in trade on Wednesday. The decline was on account of the December quarter (Q3FY22) performance, which was a mixed bag, lower-than-expected guidance, and expensive valuation.

The Q3 performance, especially on the revenue front, was below expectation. The company reported 4.3 per cent constant currency growth on a sequential basis; the Street expected this number to be 80-100 basis points higher.

The decline in a seasonally weak quarter was on account of a muted performance by the industrial products