Is L&T Technology Services Limited (NSE:LTTS) Potentially Underrated?

L&T Technology Services Limited (NSE:LTTS) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of LTTS, it is a company with great financial health as well as a a strong history of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on L&T Technology Services here.

Flawless balance sheet with proven track record

LTTS has a strong track record of performance. In the previous year, LTTS delivered an impressive double-digit return of 29%. Unsurprisingly, LTTS surpassed the Professional Services industry return of 9.5%, which gives us more confidence of the company’s capacity to drive earnings going forward. LTTS’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that LTTS manages its cash and cost levels well, which is a key determinant of the company’s health. LTTS appears to have made good use of debt, producing operating cash levels of 29.21x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NSEI:LTTS Income Statement, July 30th 2019
NSEI:LTTS Income Statement, July 30th 2019

Next Steps:

For L&T Technology Services, I’ve compiled three relevant aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for LTTS’s future growth? Take a look at our free research report of analyst consensus for LTTS’s outlook.
  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 Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LTTS? Explore our interactive list of stocks with large 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.