L&T Technology Services is the top gainer on the BSE since the opening bell. The stock price surged 15% to hit a new 52-week high at Rs.3345 and is currently trading at Rs.3315 levels. Volumes are up over 3 times.
The stock has reacted positively to its earnings for Q1Fy22 wherein it reported a 84% (YoY) jump in net profit at Rs.216 crore on a 19% rise in total revenue at Rs.1563 crore.
The market is more thrilled with the operating profit margin rising to the highest ever at 17.3%, up 5.2%.
The company said that a certain degree of normalcy has come back in the US and also Europe, which contribute over 80% of revenues and expects Japan and India to also bounce back.
The company has upped its revenue growth guidance to 15-17% in FY22 as against the earlier 13-15% as it is more optimistic about the months ahead. The company estimates widening of margins despite implementing wage hikes for junior and mid-level employees from April, and added that the hikes for others will be implemented from July onwards, which should be seen as things getting back to normal.
The company said that it could expand the margins because of levers like higher digitalization, what with quantum of work done offshore increasing 58% of the billing as against 50% before the pandemic. The company sees a headroom for increasing the offshore mix in billing to go up by another 1-2%.