Mumbai: L&T Technology Services Ltd’s initial public offering (IPO) is the third instance of a Larsen and Toubro Ltd (L&T) subsidiary hitting the public markets. And while that is hardly inspiring from an investor’s perspective, the latest IPO from L&T’s stable also looks pricey at 21 times FY16 earnings. Besides, the current environment is such that there are few takers for IT services stocks, given the lacklustre performance of these companies. Why is L&T Technology demanding a valuation of 21 times earnings, when top-tier companies in the sector such as Tata Consultancy Services Ltd (TCS) and Infosys Ltd trade at 18-19 times earnings? L&T Technology is a pure play engineering services company, which typically enjoy higher valuations in overseas markets.

Source: Mint September 11, 2016 17:37 UTC