LTM Ltd’s share price is likely to remain in the spotlight on Thursday after brokerage CLSA reiterated its bullish stance on the technology services company, despite the stock’s sharp fall in the previous session. The brokerage cites significant opportunities from the introduction of artificial intelligence and management’s ambitious growth goals.
CLSA maintains an outperform rating on LTM (LTIMindtree) stock with a price target of Rs 5,755 per share, implying a potential upside of around 42% from Wednesday’s closing price of Rs 4,054.
The brokerage’s optimism comes a day after LTM stock fell 6.6% following a broad decline in information technology stocks. The company’s stock price has fallen 9.1 per cent in the past year, lower than the Nifty 50’s decline of 4.9 per cent during the same period, giving the company a market capitalization of around Rs 1,290 crore.
According to CLSA, LTM aims to double its revenue over the next five years, with inorganic growth expected to contribute 15 to 17 percent of its expansion. The brokerage also highlighted management’s guidance to widen margins by 200 basis points by FY31.
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A key pillar of our growth strategy is artificial intelligence (AI). CLSA said management expects AI to expand the global total addressable market (TAM) for information technology services to approximately $2.3 trillion, creating even greater opportunities for technology service providers.
The brokerage’s constructive view stands in contrast to recent concerns that AI could reduce demand for certain traditional IT services. Rather, CLSA believes this technology has the potential to become a key growth driver as companies accelerate their digital transformation and AI adoption efforts.
The company’s latest product announcements also demonstrate its focus on AI. LTM recently launched a managed Secure Service Edge (SSE) solution in collaboration with Cisco. This product is built on Cisco Secure Access and is designed for cloud-first and hybrid work environments. The solution combines Cisco’s security platform with LTM’s AI-powered managed services. This enables enterprises to securely use AI applications and AI models while protecting access to applications.
LTM stock fell yesterday after brokerages were sharply divided on how artificial intelligence (AI) will shape the company’s growth prospects. UBS maintained its ‘neutral’ rating on LTM Ltd’s stock, citing management’s view that artificial intelligence could double the company’s revenue over the next five years. Meanwhile, Jefferies took a more cautious stance with its underperform rating, saying AI could reduce revenue from traditional IT services by about 25%.
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