2 reasons why L&T Tech shares fell today; should you buy, hold or sell?

Shares of L&T Technology Services Ltd (LTTS) fell 5 per cent in Friday's trade as restructuring drive sharp revenue miss in Q3, and the management lowered its FY26 guidance from double-digit earlier to “mid-single digit'. Analysts have cut their earnings estimates and largely suggested 'Neutral' or 'Hold' rating. By 12.09 pm, the IT stock had fallen 4.93 per cent to hit a low of Rs 4,035.90 apiece on BSE. 

The LTTS management noted that it is exiting certain low-margin businesses in Israel, the US, and Europe with its intention of focussing on higher-margin and fast-growing new tech spend areas. The restructuring, Nomura noted, spans across mobility and tech verticals. LTTS intends to complete this restructuring exercise by end-Q4 and has lowered.

"We cut our FY26-28F EPS by 3-4 per cent. We lower our target price to Rs 3,900 (from Rs 4,100), set at an unchanged 25 times H1 FY28F EPS. The stock currently trades at 29 times FY27F EPS. A key upside risk is stronger-than-expected growth and margin improvement," Nomura said.

MOFSL sees growth reset in the near term. Organic revenue is likely to decline in FY26, it said. "We model dollar revenue CAGR of 7.4 per cent over FY25-28E, factoring in a near-term growth reset and gradual recovery thereafter. EBIT margins are expected to improve to 15.2 per cent by FY28E. Organic revenue is likely to fall in FY26 (minus 0.8 per cent YoY CC) due to portfolio exits, regional rationalisation under the five-year Lakshya plan, and a weak FY26 exit," MOFSL said.

It cut FY26-28 estimates by 3.5 per cent to factor in the guidance revision, weaker exit, and portfolio rationalisation and suggested a target price of Rs 4,500, keeping its 'Neutral' rating intact.

On the restructuring exercise, Nuvama said: "We like this bold step, which might impact the near-term financials adversely, but shall prepare the company and improve its overall business profile for the future. We are trimming FY26E/27E EPS by 4.3 per cent/5.6 per cent on lower growth. We roll forward valuation to 25x FY28E PE; retain ‘HOLD’ with an unchanged target of Rs 4,200.

InCred Equities downgraded the stock to 'Hold' from 'Add' and trimmed its dollar revenue estimates materially and increase FY26-28 average EBIT margin assumption by 30 basis points to 15.2 per cent to account for the change in portfolio mix.