L&T INFOTECH LTD
Q2 FY 21 RESULTS ANALYSIS
DT 17 12 20
COMPANY OVERVIEW
LTI is a global technology consulting and digital solutions Company helping more than 400 clients , in 32 countries.
December 7, 2020-LTI has entered into a strategic partnership with Injazat, the UAE-based leader in digital transformation, to implement its new best-shore service delivery model that is set to redefine a new era in regional digital leadership. This partnership will see Injazat add considerable depth to its digital innovation ecosystem and customer centric approach. The partnership builds on the ongoing relationship between the two companies and consolidates Injazat’s position as the premier multi-cloud service provider in the region, with its InCloud offering.
DEC,10,2020 :ANALYST DAY PRESENTATION :
Q2FY16 to Q2FY21 :
Market cap :3.7 X - 2.1X EPS - 1.8XQtr. rev - 1.5X EBIT
Results So Far :
Growth in H1
Improved margin
42 new clients
7 Large Deals - $456M - TCV3 Since we last met
Q2 FY 21 Q1 FY21
1MN+ : 137 169
5MN+ : 48 61
10MN+ : 27 32
LTI PIPELINE : 1.9 Bn Large deal pipeline (62% YoY growth)
Management
A M Naik : Founder Chairman
S N Subrahmanyan : NonExecutive Vice Chairman
Sanjay Jalona : Managing Director & CEO
QUARTERLY RESULTS:
|
L & Toubro Infotech (in Rs. Cr.) |
Sep '20 |
Jun '20 |
Sep '19 |
YOY |
QOQ |
|
Net Sales |
2998 |
2949 |
2571 |
16.64 |
1.67 |
|
FINAL NPT |
455.6 |
416.6 |
360.1 |
26.52 |
9.36 |
|
Equity |
17.5 |
17.4 |
17.4 |
0.57 |
0.57 |
|
Reserves |
6,310 |
5,937 |
5,108 |
23.54 |
6.29 |
|
Basic EPS FV Rs.1 |
26.13 |
23.92 |
20.73 |
26.05 |
9.24 |
|
Diluted EPS |
25.95 |
23.74 |
20.52 |
26.46 |
9.31 |
|
Employees Cost |
1,780.30 |
1,823.20 |
1,592.90 |
11.76 |
-2.35 |
|
Depreciation |
89.9 |
78.1 |
66.3 |
35.6 |
15.11 |
|
Other Expenses |
532.6 |
534 |
512.2 |
3.98 |
-0.26 |
|
Total Expenditure |
2,402 |
2,435 |
2,171 |
10.64 |
-1.36 |
|
P/L Before Other Inc., Int., Excpt. Items & Tax |
595.6 |
513.9 |
399.3 |
49.16 |
15.9 |
|
Other Income |
36.7 |
65.8 |
93.7 |
-60.83 |
-44.22 |
|
P/L Before Int., Excpt. Items & Tax |
632.3 |
579.7 |
493 |
28.26 |
9.07 |
|
Interest |
19.2 |
20.8 |
19.6 |
-2.04 |
-7.69 |
|
P/L Before Tax |
613.1 |
558.9 |
473.4 |
29.51 |
9.7 |
|
Tax |
156.3 |
142.5 |
113 |
38.32 |
9.68 |
|
Net Profit |
456.8 |
416.4 |
360.4 |
26.75 |
9.7 |
|
Minority Interest |
-1.2 |
0.2 |
-0.3 |
300 |
-700 |
MP 3305
PE 31.84
VOLUMES 2,36,140
52 Wk L/H 1207.6 3515.15
TECHNICAL RATING : Bullish
Market Cap (Rs Cr.) 57,807.03
FV : Rs.1
|
Annual |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Sales |
10,878 |
9,445 |
7,306 |
6,500 |
5,846 |
|
Net Profit |
1,520 |
1,515 |
1,112 |
970 |
836 |
|
Other Income |
329 |
302 |
426 |
186 |
189 |
|
Total Income |
11,207 |
9,748 |
7,732 |
6,687 |
6,036 |
|
Total Expenditure |
9,122 |
7,709 |
6,275 |
5,448 |
4,995 |
|
EBIT |
2,085 |
2,038 |
1,457 |
1,239 |
1,040 |
|
Interest |
82 |
10 |
15 |
3 |
5 |
|
Tax |
482 |
512 |
329 |
264 |
198 |
|
CASH FLOWS |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Operating Activities |
1,643 |
1,395 |
843 |
1,169 |
858 |
|
Investing Activities |
-652 |
-743 |
-460 |
-951 |
-44 |
|
Financing Activities |
-890 |
-594 |
-407 |
-32 |
-816 |
|
Others |
8 |
-5 |
8 |
-9 |
4 |
|
Net Cash Flow |
110 |
51 |
-16 |
175 |
1 |
|
HISTORICAL PRICES |
|
|
3 YR BEFO |
1049 |
|
2YR BEFO |
1749 |
|
1YR BEFO |
1642 |
|
3 MN BEFO |
2699.9 |
|
1 MN BEF |
3059 |
|
1 WEEK |
3260.05 |
|
NOW |
3310 |
Type Dividend% Ex-Dividend date
Interim 1500 Oct 27, 2020
Final 1550 Jul 09, 2020
Interim 1250 Oct 24, 2019
Final 1550 Jul 11, 2019
Interim 1250 Oct 31, 2018
|
Share Holding Pattern in (%) |
||||
|
Standalone |
Sep-20 |
Mar-20 |
Dec-19 |
Jun-19 |
|
Promoters |
74.36 |
74.53 |
74.58 |
74.79 |
|
Pledged |
0 |
0 |
0 |
0 |
|
FII/FPI |
11.21 |
9.46 |
9.11 |
8.03 |
|
Total DII |
8.19 |
9.03 |
9.07 |
9.92 |
|
Fin.Insts |
0 |
0.09 |
0.02 |
0.03 |
|
Insurance Co |
0.71 |
1.41 |
1.61 |
0.44 |
|
MF |
5.14 |
5.3 |
5.18 |
6.1 |
|
Others DIIs |
2.34 |
2.23 |
2.26 |
3.35 |
|
Others |
6.23 |
6.98 |
7.25 |
7.27 |
|
Total |
99.99 |
100 |
100.01 |
100.01 |
|
Per Share Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Basic EPS (Rs.) |
87.45 |
87.67 |
64.93 |
57.08 |
51.02 |
|
Diluted Eps (Rs.) |
86.61 |
86.43 |
63.48 |
55.8 |
49.31 |
|
Book Value |
310.64 |
281.3 |
224.48 |
183.92 |
125 |
|
Dividend/Share (Rs.) |
28 |
28 |
21.5 |
16.55 |
35.25 |
|
Face Value |
1 |
1 |
1 |
1 |
1 |
|
Margin Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Gross Profit Margin (%) |
21.68 |
23.13 |
22.08 |
21.79 |
20.77 |
|
Operating Margin (%) |
19.17 |
21.57 |
19.94 |
19.05 |
17.79 |
|
Net Profit Margin (%) |
13.97 |
16.04 |
15.22 |
14.93 |
14.3 |
|
Return Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Return on Networth / Equity (%) |
28.12 |
30.97 |
28.8 |
30.87 |
39.36 |
|
ROCE (%) |
32.11 |
40.58 |
27.75 |
30.42 |
47.87 |
|
Return On Assets (%) |
17.22 |
22.72 |
20.65 |
21.89 |
26.44 |
|
Liquidity Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Current Ratio (X) |
2.71 |
3.14 |
3.05 |
2.68 |
2.04 |
|
Quick Ratio (X) |
2.71 |
3.14 |
3.05 |
2.68 |
2.04 |
|
Leverage Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Debt to Equity (x) |
0.01 |
0 |
0 |
0 |
0.03 |
|
Interest Coverage Ratios (%) |
25.25 |
192.3 |
92.82 |
387.19 |
179.4 |
|
Turnover Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
Asset Turnover Ratio (%) |
123.27 |
141.63 |
135.74 |
146.6 |
184.88 |
|
Inventory Turnover Ratio (X) |
0 |
0 |
0 |
0 |
0 |
|
Valuation Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
P/E (x) |
0 |
19.42 |
20.65 |
12.52 |
0 |
|
P/B (x) |
4.61 |
5.99 |
5.98 |
3.87 |
0 |
|
EV/EBITDA (x) |
10.35 |
13.22 |
14.07 |
8.32 |
0 |
|
P/S (x) |
2.29 |
3.1 |
3.16 |
1.87 |
0 |
|
Growth Ratios |
Mar-20 |
Mar-19 |
Mar-18 |
Mar-17 |
Mar-16 |
|
3 Yr CAGR Sales (%) |
18.72 |
17.34 |
13.65 |
1766.34 |
1701.48 |
|
3 Yr CAGR Net Profit (%) |
16.13 |
21.91 |
13.1 |
890.2 |
842.23 |
The company signed two large contracts so far this quarter and sees strong opportunities in the cloud and data products business
Larsen & Toubro Infotech Ltd (LTI) won a $205 million project and said that its large deal pipeline is up a whopping 62 percent from last year to $1.9 billion.
Large deals have been key to LTI’s revenue growth outperformance compared to listed peers in India. As COVID-19 struck the world project inflows slowed. As per quarterly disclosures LTI won two large contracts amounting to $61 million in six months to September. Comparatively the company won 8 large deal wins last fiscal year with total contract value of more than $300 million.
LTI signed another large project so far this quarter, the management told analysts.
LTI has been pointing to slow conversion of project pipeline into orders, especially those involving large consolidation and transformation opportunities. The management maintains that the conversions are slow. Still, strong expansion in project pipeline should help LTI improve order wins, though the pace of decision making at customers will still play an important role.
Revenues from cloud business have the potential to grow from the current $180 million to $1 billion in three years, the management told analysts. The addressable market for data products business is also significant. LTI plans to invest in customer management, partnerships, research.
LTI already works with the so called cloud hyper-scalers Amazon AWS, Google Cloud and Microsoft Azure. Also, the company works with a significant portion of its customers on cloud-related engagements. This along with the increasing usage of data products by enterprises gives LTI headway in new business segments.
L&T Infotech has announced a separate business unit for Cloud and expects $1 billion in revenue in the next 3-5 years, according to two analyst reports.
Apart from a separate business unit (BU) for Cloud, the company also have a new BU for products.
In addition, LTI is a Tier I partner for many hyper scalars and nearly half of its existing client base works with the company on cloud-related engagements. This is the opportunity the company is looking to tap into. Current revenues from cloud stands at $185 million.
LTI’s aspirations for $1bn in cloud revenue in three years implies close to 78 percent segmental CAGR.
The product business will help clients make sense of data generated by moving to Cloud. This would be done through its five key products and also SaaS version of those products to reach larger audience.
these five products, which are built around data, include Decisions, ML Logistics, Agnitio, Marketplace, and Leni. These will be taken to market.
“Management hinted at investments in engineering, R&D, sales, and marketing of these products,” the report said. The company would offer these products in Software-as-a-Service format, where they can be accessed in app stores as well.
8 REASONS WHY COVID WAS A POSITIVE GAME CHANGER :
1.VIDEO is the new travel
2. when the world of business changes fundamentally, it becomes a battle of New ideas
3. SLOW ADOPTERS :(regions and customers) have experienced the true benefits of Global delivery
4. Industry verticals that were slow to adopt digital have accelerated their efforts to transform
5.The age old adage of ' a friend in need' holds true in business Relationships as well.
6. The most important sales skill in today's world is your ability to JUMP
7. Solving the Society has never been more important.
8. Grit (Passion and Perseverance) is the key ingredient for success.
ALLIANCES WITH :
ORACLE
SAP
MICROSOFT
AWS
GOOGLE CLOUD
IBM
SERVICE NOW
SNOWFLAKE
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