L&T Technology Services Limited's (NSE:LTTS) 6.2% loss last week hit both individual investors who own 74% as well as institutions

Key Insights

• The considerable ownership by public companies in L&T Technology Services indicates that they collectively have a greater say in management and business strategy
• Larsen & Toubro Limited owns 74% of the company
• 15% of L&T Technology Services is held by Institutions

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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. 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 15% came under pressure after market cap dropped to ₹434b 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.

Check out 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 can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at L&T Technology Services' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in L&T Technology Services. Larsen & Toubro Limited is currently the company's largest shareholder with 74% of shares outstanding. This implies that they have majority interest control of the future of the company. With 6.9% and 1.8% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and SBI Funds Management Limited are the second and third largest shareholders.

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 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own less than 1% of L&T Technology Services Limited. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₹2.9b worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 11% 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

Public companies currently own 74% of L&T Technology Services stock. 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:

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. Take risks for example - L&T Technology Services has 1 warning sign we think you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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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.