L&T Technology Services (NS:): L&T Technology Services (LTTS) maintained its FY24E outlook implying a powerful exit in Q4FY24E, whilst Q3 efficiency was decrease than anticipated. Revenue development was impacted by softness within the Telecom & Hi-Tech vertical (adj. for SWC seasonality). Guidance reiterated at 17.5% to 18.5% CC for FY24E implies 4-7% QoQ CC for Q4FY24E, which will probably be supported by (1) sequential enchancment in furloughs/billing days/SWC seasonality, (2) six offers of USD 10mn+ TCV booked in Q3FY24, and (3) strategic partnership with bp (medium-term driver) and focused mining program for high purchasers. While LTTS’ prowess as a number one pureplay ER&D service supplier with a diversified vertical base and robust credentials throughout domains persists, development print is impacted by an extended deal conversion cycle and enterprise cyclicality regardless of robust industrial tailwinds. Risk-reward is unfavorable for LTTS as present valuations indicate >16% USD income CAGR over FY23-33E. Maintain REDUCE on LTTS with a TP of INR 4,915, based mostly on 27x FY26E EPS.

Federal Bank (NS:): Federal Bank (FB) reported its highest-ever quarterly earnings, regardless of a miss on NII, on the again of wholesome mortgage development (+18% YoY), revenue from stake sale in its NBFC subsidiary and decrease credit score prices (31bps annualized). Given the aggressive depth for low-cost deposits, FB too noticed a decline in CASA ratio of 54bps QoQ taking its CASA ratio to 30.6%. Differentiated FinTech ecosystem partnerships to realize market share in comparatively high-yield segments are key to driving additional enterprise productiveness on either side of the steadiness sheet. FB seems on observe to ship its focused RoA of 1.4% over FY24-25; nevertheless, we see challenges to development with the credit-deposit ratio more likely to be capped, going ahead. Following the RBI advisory on CEO succession, the Board of Directors has commissioned an company to recommend inner/exterior candidates inside 2-3 months. We tweak our estimates to consider decrease provisions offset by increased opex; and preserve BUY, with a TP of INR190 (1.4x Sep-25 ABVPS).

L&T Technology Services

Unchanged Guidance Implies a Strong This autumn

L&T Technology Services (LTTS) maintained its FY24E outlook implying a powerful exit in Q4FY24E, whilst Q3 efficiency was decrease than anticipated. Revenue development was impacted by softness within the Telecom & Hi-Tech vertical (adj. for SWC seasonality). Guidance reiterated at 17.5% to 18.5% CC for FY24E implies 4-7% QoQ CC for Q4FY24E, which will probably be supported by (1) sequential enchancment in furloughs/billing days/SWC seasonality, (2) six offers of USD 10mn+ TCV booked in Q3FY24, and (3) strategic partnership with bp (medium- time period driver) and focused mining program for high purchasers. While LTTS’ prowess as a number one pureplay ER&D service supplier with a diversified vertical base and robust credentials throughout domains persists, development print is impacted by an extended deal conversion cycle and enterprise cyclicality regardless of robust industrial tailwinds. Risk-reward is unfavorable for LTTS as present valuations indicate >16% USD income CAGR over FY23-33E. Maintain REDUCE on LTTS with a TP of INR 4,915, based mostly on 27x FY26E EPS.

Q3FY24 highlights: (1) LTTS reported income development of +0.9% QoQ CC at USD 291mn (HSIE est. USD 299mn), pushed by medical gadgets in Q3 and lower-than-anticipated efficiency in telecom & hi-tech vertical. (2) LTTS’ development was broad-based throughout verticals; nevertheless, softness in industrial merchandise (+0.3% QoQ) continued attributable to delayed decision-making and softness within the constructing automation sub-segment. Medical gadgets reported +1.9% QoQ development pushed by digital expertise and provide chain optimization; nevertheless, the corporate expects softer development within the close to time period attributable to finances constraints of enterprise purchasers. (3) EBITM improved 11bps QoQ at 17.2% in Q3, supported by enchancment in plant engineering and transportation segmental margin. (4) LTTS bagged six offers of TCV USD 10mn+, which included one deal of USD 40mn+ and one deal of USD 20mn. Commentary on the deal pipeline was optimistic with a number of giant deal alternatives, which gives income visibility for This autumn. (5) The administration maintained its income development outlook of 17.5-18.5% for FY24E, EBITM of 17% for FY24E & 18% for H1FY26E, and DSO goal of 115-125 days for FY24E.

Outlook: We have factored in USD income development of +17.6/14.9/16.2% and EBITM of 17.3/18.0/18.5% for FY24/25/26E respectively translating into 20% EPS CAGR over FY24-26E. LTTS is at present buying and selling at 36x FY25E and 29x FY26E, with FY24-26E EPS CAGR at 20%.

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