ICICI Securities Maintains Hold Recommendation, Targets Rs 4380

ICICI Securities Lowers Earnings Estimates for LTM

ICICI Securities has released a research report on LTM, assessing the company's performance and prospects. According to the report, LTM is executing well in several key areas. Firstly, the company has seen significant growth in large deal wins, securing six deals worth over USD 100 million in FY26. Furthermore, LTM has benefited from winning against competition in deal renewals, positioning the company as a net beneficiary.

In addition to these positive developments, LTM has also experienced a good recovery in top technology accounts in Q4, driven by AI-led productivity gains. However, the report highlights potential headwinds that may impact revenue growth for FY27. These headwinds include AI-led deflation, a delay in the ramp-up of the CBDT large deal, and a slower recovery in top BFSI accounts.

As a result of these factors, ICICI Securities has lowered its earnings per share (EPS) estimates for LTM. The EPS estimates for FY27 and FY28 have been reduced by 1% and 2.5%, respectively. This downward revision is driven by cuts in revenue and margins, partly offset by an increase in USD/INR assumptions.

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Recommendation

In light of these developments, ICICI Securities maintains a HOLD recommendation for LTM. The revised target price for the company is INR 4,380, based on an unchanged target price-to-earnings (P/E) ratio of 19x and an estimated EPS of INR 230 for FY28.

Note: The above table presents a comparison of LTM's revenue growth, margin, and EPS estimates for FY26, FY27, and FY28.

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