What Do Analysts Think About LT Technology Services Limited's (NSE:LTTS) Earnings Trajectory?

Simply Wall St

In March 2019, L&T Technology Services Limited (NSE:LTTS) released its latest earnings announcement, which suggested that the business experienced a sizeable tailwind, eventuating to a high double-digit earnings growth of 51%. Below, I've laid out key growth figures on how market analysts view L&T Technology Services's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

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Check out our latest analysis for L&T Technology Services

Market analysts' consensus outlook for this coming year seems rather subdued, with earnings expanding by a single digit 7.2%. The growth outlook in the following year seems much more positive with rates reaching double digit 23% compared to today’s earnings, and finally hitting ₹10b by 2022.

NSEI:LTTS Past and Future Earnings, May 23rd 2019

While it is useful to be aware of the growth year by year relative to today’s level, it may be more valuable gauging the rate at which the earnings are moving on average every year. The pro of this approach is that it removes the impact of near term flucuations and accounts for the overarching direction of L&T Technology Services's earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I've inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 10%. This means, we can assume L&T Technology Services will grow its earnings by 10% every year for the next couple of years.

Next Steps:

For L&T Technology Services, I've compiled three relevant factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is LTTS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether LTTS is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LTTS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.