Larsen & Toubro Infotech share price: Sell Larsen & Toubro Infotech, target price Rs 3550: Emkay Global

Larsen & Toubro Infotech share price: Sell Larsen & Toubro Infotech, target price Rs 3550: Emkay Global

Did you Know? Stock score of Larsen & Toubro Infotech Ltd moved down by 1 in 3 months on a 10-point scale. View Latest Stock Report »

has sell call on Larsen & Toubro Infotech Ltd. with a target price of Rs 3550. The current market price of Larsen & Toubro Infotech Ltd. is Rs 4184.Time period given by analyst is one year when Larsen & Toubro Infotech Ltd. price can reach defined target.Larsen & Toubro Infotech Ltd., incorporated in the year 1996, is a Large Cap company (having a market cap of Rs 73139.25 Crore) operating in IT Software sector.For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 3372.40 Crore, up 4.68 % from last quarter Total Income of Rs 3221.70 Crore and up 9.42 % from last year same quarter Total Income of Rs 3082.10 Crore. Company reported net profit after tax of Rs 545.70 Crore in latest quarter.Cuelogic will be integrated with LTI’s Digital practice, which is a focus area for LTI. The acquisition will augment its domain capabilities. Given the size of the acquisition (<0.5% of LTI’s revenue), the brokerage does not expect any meaningful revision to the earnings forecasts. It has a Sell rating on the stock with a TP of Rs3,550 (24x FY23E EPS).Promoters held 74.3 per cent stake in the company as of Dec 30, 2020, while FIIs held 13.3 per cent, DIIs 4.6 per cent and public and others 7.8 per cent.

Larsen & Toubro Infotech Limited (NSE:LTI) Looks Like A Good Stock, And It’s Going Ex-Dividend Soon

Larsen & Toubro Infotech Limited ( ) stock is about to trade ex-dividend in 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company’s books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Larsen & Toubro Infotech investors that purchase the stock on or after the 1st of July will not receive the dividend, which will be paid on the 16th of August.

The company’s upcoming dividend is ₹25.00 a share, following on from the last 12 months, when the company distributed a total of ₹40.00 per share to shareholders. Calculating the last year’s worth of payments shows that Larsen & Toubro Infotech has a trailing yield of 0.9% on the current share price of ₹4215.45. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That’s why we should always check whether the dividend payments appear sustainable, and if the company is growing.

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Larsen & Toubro Infotech’s payout ratio is modest, at just 36% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Luckily it paid out just 25% of its free cash flow last year.

It’s positive to see that Larsen & Toubro Infotech’s dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

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NSEI:LTI Historic Dividend June 27th 2021

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we’re glad to see Larsen & Toubro Infotech’s earnings per share have risen 17% per annum over the last five years. Earnings per share are growing rapidly and the company is keeping more than half of its earnings within the business; an attractive combination which could suggest the company is focused on reinvesting to grow earnings further. Fast-growing businesses that are reinvesting heavily are enticing from a dividend perspective, especially since they can often increase the payout ratio later.

Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. In the past five years, Larsen & Toubro Infotech has increased its dividend at approximately 24% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

The Bottom Line

Has Larsen & Toubro Infotech got what it takes to maintain its dividend payments? It’s great that Larsen & Toubro Infotech is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It’s disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. There’s a lot to like about Larsen & Toubro Infotech, and we would prioritise taking a closer look at it.

On that note, you’ll want to research what risks Larsen & Toubro Infotech is facing. Case in point: We’ve spotted you should be aware of.

If you’re in the market for dividend stocks, we recommend

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Larsen & Toubro Infotech Q1 results: Profit rises 19.3% YoY to Rs 496.8 crore, misses estimates; declares dividend of Rs 10/share

IT services company Larsen & Toubro Infotech on Thursday reported a 19.3 percent jump in its net profit to Rs 496.8 crore for the quarter ended June 30, 2021.

In the corresponding quarter last year, the Mumbai-headquartered company posted a net profit of Rs 416 crore. CNBC-TV18 Poll had predicted a profit of Rs 499 crore for the quarter under review.

The Board of Directors at its meeting held on July 15, 2021, has recommended a special dividend of Rs 10 per equity share (Face value Rs 1) for the financial year 2021-22.

Sanjay Jalona, chief executive officer and managing director, said, “We are pleased to report our best ever Q1 sequential growth of 5.1% driven by holistic growth across our verticals, service lines, client pyramid and geographies. Our healthy pipeline and continued strong demand make us confident of our future growth.”

“Over these past 5 years, we have delivered USD revenue CAGR of 13.5% and more than doubled our net profit. I am proud of how we continue to innovate and deliver year-on-year industry-leading growth. I am also excited as we strengthen our digital engineering capabilities welcoming Cuelogic Technologies to the LTI family,” he said.

The results came after the close of the market hours. Shares of Larsen & Toubro Infotech ended at Rs 4,417.30, up by Rs 196.65, or 4.66 percent on the BSE.