Both public companies who control a good portion of L&T Technology Services Limited (NSE:LTTS) along with institutions must be dismayed after last week's 4.7% decrease

Key Insights

• L&T Technology Services' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Larsen & Toubro Limited owns 74% of the company
• Recent sales by insiders

Every investor in L&T Technology Services Limited (NSE:LTTS) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 74% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 13% came under pressure after market cap dropped to ₹461b last week,public companies took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about L&T Technology Services.

View our latest analysis for L&T Technology Services

What Does The Institutional Ownership Tell Us About L&T Technology Services?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in L&T Technology Services. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see L&T Technology Services' historic earnings and revenue below, but keep in mind there's always more to the story.

L&T Technology Services is not owned by hedge funds. Our data shows that Larsen & Toubro Limited is the largest shareholder with 74% of shares outstanding. This implies that they have majority interest control of the future of the company. Life Insurance Corporation of India, Asset Management Arm is the second largest shareholder owning 6.6% of common stock, and Seafarer Capital Partners, LLC holds about 1.2% of the company stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of L&T Technology Services

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that L&T Technology Services Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₹3.2b worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over L&T Technology Services. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

It appears to us that public companies own 74% of L&T Technology Services. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand L&T Technology Services better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for L&T Technology Services you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.