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Prabhudas Lilladher Bullish on L&T Tech: Sets Rs 4360 Target Price

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  Published in Automotive and Transportation on Monday, December 29th 2025 at 13:19 GMT

Prabhudas Lilladher Remains Bullish on L&T Tech, Sets Rs 4360 Target Price – Here’s Why

Larsen & Toubro (L&T) subsidiary LT Technology Services (LTS), formerly known as L&T Infotech, continues to attract positive attention from brokerage houses. Prabhudas Lilladher, a prominent Indian financial services firm, has reaffirmed its “Accumulate” rating on the stock and set a target price of Rs 4360 per share, representing a significant potential upside from current levels. This recommendation comes amidst a mixed market sentiment surrounding the IT sector, highlighting LTS’s perceived strengths and growth prospects.

The Core Recommendation & Rationale:

Prabhudas Lilladher's positive outlook stems primarily from LTS’s strong deal flow, robust revenue growth, and improving margins. The brokerage believes that LTS is well-positioned to capitalize on the ongoing digital transformation wave across industries. Their report emphasizes the company's ability to consistently win large deals, demonstrating its competitiveness in a crowded market. This consistent deal wins are seen as a key indicator of future revenue generation and sustained growth.

The target price of Rs 4360 implies an upside of roughly 21% from LTS’s current trading levels (as of the report's publication date). This projection is based on Prabhudas Lilladher’s assessment of the company’s earnings potential, considering factors like revenue growth, profitability, and valuation multiples.

Key Positives Driving the Optimism:

Several factors contribute to Prabhudas Lilladher’s bullish stance:

• Strong Deal Flow & Order Book: LTS has consistently demonstrated a strong ability to secure new business. The brokerage highlights that the company's order book remains healthy, providing visibility into future revenue streams. This is particularly important in an environment where IT spending can be volatile.
• Revenue Growth Momentum: LTS has been exhibiting consistent revenue growth, outpacing some of its peers in the Indian IT sector. This growth is attributed to a combination of organic expansion and strategic acquisitions (discussed further below).
• Margin Improvement: While margin pressures have impacted many IT companies globally, Prabhudas Lilladher notes that LTS has shown signs of improving margins. This suggests effective cost management and operational efficiencies. The report likely considers the impact of wage inflation and other rising costs on profitability.
• Focus on Digital Engineering & Consulting: LTS’s strategic focus on digital engineering services and consulting is seen as a significant advantage. These higher-value services command better margins and are less susceptible to pricing pressures compared to traditional IT outsourcing. This aligns with the broader industry trend towards specialized, outcome-based service offerings.
• Strategic Acquisitions: LTS has been actively pursuing acquisitions to expand its capabilities and market reach. The acquisition of Montaje in 2023, for example, strengthened its engineering services portfolio, particularly in the industrial sector. These strategic moves are viewed positively by Prabhudas Lilladher as they contribute to diversification and growth. (You can read more about Montaje here: [ https://www.lttechservices.com/newsroom/montaje-acquisition/ ])

Potential Risks & Considerations:

While the outlook is positive, Prabhudas Lilladher’s report likely acknowledges potential risks that could impact LTS's performance:

• Global Economic Slowdown: A slowdown in the global economy could negatively affect IT spending across various industries. This remains a significant risk for all IT companies.
• Geopolitical Uncertainties: Geopolitical tensions and trade wars can disrupt business operations and supply chains, impacting revenue growth.
• Currency Fluctuations: LTS derives a significant portion of its revenue from international markets. Currency fluctuations could impact profitability when converting foreign earnings back into Indian Rupees.
• Competition: The IT services market is highly competitive, with numerous players vying for the same clients. LTS faces competition from both global giants and other Indian IT firms.
• Attrition Rates: While not explicitly mentioned in this summary, high employee attrition rates are a persistent challenge for the Indian IT sector, potentially impacting project delivery and increasing costs.

Contextualizing LTS within L&T & the Broader Market:

LT Technology Services is an integral part of Larsen & Toubro's (L&T) ecosystem. Being a subsidiary provides LTS with certain advantages, including access to L&T’s vast network and expertise. However, it also means that LTS's performance is indirectly linked to L&T's overall financial health.

The Indian IT sector has been under scrutiny recently due to concerns about slowing growth in key markets like the US and Europe. While some companies have reported weaker-than-expected results, Prabhudas Lilladher’s recommendation for LTS suggests that they believe the company is better positioned than others to navigate these challenges. Their analysis likely considers LTS's diversified service offerings and client base, which may mitigate the impact of slowdowns in specific regions or industries.

Disclaimer & Conclusion:

It's crucial to remember that Prabhudas Lilladher’s recommendation represents their opinion based on available information at the time of publication. Investment decisions should always be made after conducting thorough research and considering individual risk tolerance. This report is not a substitute for professional financial advice.

In conclusion, Prabhudas Lilladher’s “Accumulate” rating and Rs 4360 target price for LT Technology Services reflect confidence in the company's growth prospects and its ability to capitalize on the digital transformation trend. While risks remain, the brokerage believes that LTS’s strong deal flow, revenue momentum, margin improvement, and strategic acquisitions make it an attractive investment opportunity within the Indian IT sector. Investors interested in the IT space should carefully consider this analysis alongside other factors before making any decisions.