L&T Technology Services slips 5% post Q3; most brokerages slash target

Most brokerages have cut their target price on L&T Technology Services after it reported mixed Q3FY26 results on Thursday and revised its guidance for FY2026, to come in at a mid single-digit rate, lower than its earlier forecast of double-digit growth.

 

At 9:30 AM, L&T Technology Services shares were trading 4.11 per cent lower at ₹4,071 per share. In comparison, BSE Sensex was trading 0.34 per cent higher at 83,665.12. Intra-day, the stock slipped 4.5 per cent to the day’s low at ₹4,053.6 per share. 

L&T Technology Services Q3 results highlights:

• L&T Technology Services (LTTS) reported a consolidated net profit of ₹302.6 crore in Q3FY26, marking a 6 per cent year-on-year (Y-o-Y) drop, from ₹322.4 crore. On a sequential basis, profit fell 7.9 per cent from ₹328.7 crore.
• The decline in profit was triggered by ₹35.4 crore provision linked to the implementation of new labour codes.
• LTTS' revenue from operations, however, jumped 10.2 per cent Y-o-Y to ₹2,923.5 crore from ₹2,653 crore in Q3 FY25. Sequentially, it decreased marginally by 1.8 per cent from ₹2,979.5 crore in Q2FY26.
• The company’s earnings before interest and taxes (EBIT) margin for the quarter was at 14.6 per cent.

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Brokerages’ view on L&T Technology Services 

Nomura | Reduce | Target cut to ₹3,900 from ₹4,100

The brokerage noted that L&T Technology Services delivered a sharp revenue miss in Q3FY26, largely driven by restructuring actions and exiting low-margin businesses. LTTS reported $326 million revenue, down 2.8 per cent quarter-on-quarter (Q-o-Q) and up 3.9 per cent Y-o-Y in constant currency (CC), which was well below Nomura’s expectation of 3 per cent Q-o-Q CC. Additionally, the company slashed its full-year revenue growth guidance, which prompted Nomura to lower its own revenue growth assumptions for FY26–28 by a substantial 340–750 bps.

 

 

The company’s exit from low-margin businesses in the US, Europe, and Israel is estimated to affect roughly 5–5.5 per cent of the total business, leading to lower growth expectations in the near term.

 

Further, due to the lower revenue base and the impact of the restructuring, Nomura reduced its Earnings Per Share (EPS) estimates for FY26–28 by 3–4 per cent.

Motilal Oswal Financial Services | Neutral | Target cut to ₹4,500 from ₹4,800

Motilal Oswal cut its FY26–FY28 estimates by about 3.5 per cent to reflect the guidance revision, a weaker exit rate, and portfolio rationalisation under the company’s five-year Lakshya plan. It models a USD revenue compound annual growth rate (CAGR) of 7.4 per cent over FY25–FY28E, assuming a near-term growth reset followed by gradual recovery, with Ebit margin improving to 15.2 per cent by FY28E. 

 

Organic revenue is seen declining in FY26 (down 0.8 per cent Y-o-Y CC) due to portfolio exits and regional rationalisation, while sustainability remains steady and mobility shows early signs of bottoming out.  ALSO READ | Analysts continue to back HDFC AMC after strong Q3; expect steady growth

Emkay Global Financial Services | Add | Target cut to ₹4,500 from ₹4,750

Emkay noted that management cut FY26 revenue growth guidance to mid-single digits, implying flat sequential growth in Q4. It also said most of the restructuring impact has already been absorbed in Q3, with the remaining impact factored into guidance. The brokerage cut its FY26–FY28 EPS estimates by 4.5–5.4 per cent to reflect the revenue miss and ongoing transition.

 

While Emkay expects a negative near-term stock reaction due to the revenue miss and guidance downgrade, it believes recovery in revenue, improving margins, and more reasonable valuations post-correction support its stance. 

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.