LTTS is top midcap loser

L&T Technology Services (LTTS) is among the top three losers on the BSE and top mid-cap loser since morning; the stock price fell 6.5% to hit an intraday low at Rs.3405.50 while volumes were pretty high. Its 52-week low is at Rs.2923.35.

The company yesterday evening announced that it has agreed to acquire the Smart World & Communications business (SWC) of its parent company Larsen & Toubro (L&T). This is through a slump sale (all cash) for a consideration of Rs 800 crore. The acquisition is to be completed in three months.

SWC is an intelligence solution provider operating in communications, safe and smart solutions, and cybersecurity. It generated revenue of Rs.1098 crore in FY22 for L&T.

This is not the reason for the slump in stock price; global brokerage, Morgan Stanley said that its stance of ‘underweight’ on the stock remains as it feels transition of SWC's domestic business to a global clientele profile will weigh on sentiment. It has set a target price of Rs.3300.