Home NewsStock Market News L&T tech share price: L&T Tech shares tumble over 6%. Here’s why

L&T tech share price: L&T Tech shares tumble over 6%. Here’s why

by WOOWinvest
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L&T tech share price: L&T Tech shares tumble over 6%. Here’s why

Shares of L&T Technology Services (LTTS) tumbled 6.4% to Rs 3,405 in Friday’s intraday trade on the BSE after the company signed an agreement with parent Larsen & Toubro to acquire its Smart World & Communication business for Rs 800 crore. The acquisition is expected to be completed in three months.

This acquisition is a continuation of LTTS’ 6 Big Bets strategy in 5G, sustainability and digital products & AI, the company said in a BSE filing.

Smart World & Communication (SWC) was founded in 2016 to cater to the demands in smart cities, address opportunities and provide smart solutions in the areas of end-to-end communications, city surveillance and intelligent traffic management system for the government as well as enterprises.

At 2 pm, the scrip was trading 5% lower at Rs 3,458.5 over its last day’s closing price of Rs 3,640.5 per share. The stock has risen about 11% in the last six months, while it has dropped nearly 40% in the last year .

Technically, LTTS’ relative strength index (RSI) is below 30, indicating it is oversold. The moving average convergence divergence (MACD) line has been below the signal line since December 12, suggesting bearish bias.

Domestic brokerage firm Kotak Institutional Equities maintained its sell rating on L&T Technology Services, citing expensive valuation, which might not help in fixing the expected pull-back in the company’s tech spending. The brokerage has a target price of Rs 3,200 on the stock.

LTTS in a regulatory filing mentioned “Rs 800 crore, subject to customary working capital adjustments as set out in the agreement” as consideration for sale. SWC has an employee base of over 700 engineers from diversified technology domains and has crossed an venue of an Rnual 1,000 crore, LTTS said in a statement. SWC has expertise in the area of ​​next-gen communications and has been instrumental in network designing, planning, implementation and management, including Network Operations Center (NOC), OSS, Datacenter, Cloud/Private 5G of over 25,000 locations across India, according to the statement.

SN Subrahmanyan, CEO & MD of Larsen & Toubro, said by combining with a global engineering services player like LTTS, SWC offerings across next-gen networks, smart spaces, and cybersecurity will help unlock new synergies across the technology spectrum.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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