L&T Technology Services Limited's (NSE:LTTS) 10% loss last week hit both individual investors who own 74% as well as institutions

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
• Institutions own 15% of L&T Technology Services

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A look at the shareholders of L&T Technology Services Limited (NSE:LTTS) can tell us which group is most powerful. With 74% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of public companies took a hit after last week’s 10% price drop, institutions with their 15% holdings also suffered.

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

Check out our latest analysis for L&T Technology Services

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

L&T Technology Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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.

We note that hedge funds don't have a meaningful investment in L&T Technology Services. The company's largest shareholder is Larsen & Toubro Limited, with ownership of 74%. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 6.9% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of L&T Technology Services

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of L&T Technology Services Limited in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own ₹2.2b worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. 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

We can see that public companies hold 74% of the L&T Technology Services shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for L&T Technology Services that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts .

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.

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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.