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On Wednesday, Kotak maintained its sell rating on L&T Technology Services Ltd. (LTTS:IN) with a price target of INR 4,400.00. The firm acknowledged LTTS's recent investor day presentations, which outlined the company's ambitions to grow its business to $2 billion in revenue and achieve an EBIT margin between 17% and 18% over the medium term.
LTTS has introduced a revised organizational structure, assigning profit and loss responsibility to each of its three business segments. These divisions have each developed strategies to reach $1 billion in revenues along with some margin improvement in the coming years.
Kotak's analysis supports the direction of LTTS's strategic plans but points to high valuations as a reason for maintaining the sell rating. The firm's valuation of the company remains at a fair value (FV) of INR 4,400.00, indicating no change from previous assessments.
The financial institution's stance comes even as LTTS is making efforts to scale up its operations and improve profitability. The sell rating suggests that despite the company's positive plans for growth and efficiency, the current stock price does not offer an attractive entry point for investors according to Kotak's valuation models.
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