According to Anand Rathi's research report dated October 18, 2026, the brokerage has issued a buy rating on LTM with a target price of ₹5,125. The recommendation is based on strong Q2FY27 performance, with the stock trading at FY28/29e P/E of 18.6x/16.8x at current market price. The target price implies ~16.7% upside from current levels, with the valuation not including the proposed Randstad Technology Consulting Services business acquisition. As per Anand Rathi's latest report, the brokerage has revised FY27/28/29e revenue and EPS estimates by 0.0%/+0.1%/+0.3% respectively, with 10.9% adjusted EPS CAGR over FY27-29e.
LTM delivered a steady Q2FY27 performance with revenue of $1,235mn (+1.1% q/q cc; +5.1% y/y cc) and EBIT margin expanding 10bps q/q to 15.6%. However, headline growth was impacted by a ~60-70bps sequential revenue drag from Saudi Arabia and seasonal renewals in Technology & Services (-4.0% q/q cc). The company maintained margins despite wage hikes and AI investments, though relatively high utilisation limits immediate productivity-led gains. AI revenues reached 13.4% mix (vs. 12% in Q1), growing 40% y/y, with traditional outsourcing facing pricing pressure while AI work offers higher rates and gross margins. Financial Services and Production segments led the growth momentum during the quarter.
LTM remains confident of stronger growth in H2FY27, supported by deal ramp-ups and accelerating AI adoption. The company has revised FY27/28/29e revenue and EPS estimates by 0.0%/+0.1%/+0.3% respectively, with 10.9% adjusted EPS CAGR over FY27-29e. However, the softer order inflow of $1.26bn (vs. $1.68bn in Q1) and measured commentary on matching FY26 growth suggest the pace of acceleration still needs demonstration. The highlight was AI revenues reaching 13.4% mix, growing 40% y/y, with rising AI revenue offering scope for growth and margin expansion, though benefits will be gradual amid continued investments and execution requirements from the Randstad acquisition.
Following Anup Bagchi's appointment as the new Managing Director, uncertainty around leadership has eased, as reported by Anand Rathi. However, potential exit of senior executives, including Kaizad Bharucha's request for early cessation, could lead to some business disruptions. Despite these risks, the brokerage maintains its positive outlook citing reasonable valuation and favourable sector tailwinds. The company has adjusted forex hedge losses in FY27 estimates, reflecting the impact of currency fluctuations on business operations. With material productivity headwinds largely absorbed, the rising AI revenue stream provides a foundation for sustained growth and margin expansion, though the benefits will materialize gradually amid continued investments.
