Larsen & Toubro Infotech surges on the bourses

Larsen & Toubro Infotech (LTI) on Thursday announced that it has signed a definitive agreement for acquisition of 100 per cent stake in PowerupCloud Technologies. The company will settle this transaction for cash consideration.

The said acquisition is subject to customary closing conditions which company expects to get completed within 6 weeks. PowerupCloud is an AWS Premier Consulting company with capabilities in Cloud Consulting, migration, DevOps automation, cloud native application development, managed services, data warehousing, Bl dashboards, machine learning and Big Data and having product platforms Viz. 'Cloud Ensure: and 'Botzer’. This acquisition will help LTI strengthen its cloud services capabilities through a combination of right leadership, team, assets and ecosystem connects, which in turn will enable LTI to provide better services to its existing and new clients.

LTI will acquire the PowerupCloud at an enterprise value of US$ 15 million which translate EV/sales of 4.3x on FY19 revenue. From revenue of US$ 0.96 million in 2017 it grew to US$ 3.5 million in 2019.

The company also declared its second quarter result of FY20. Revenue for the quarter grew 3.4 per cent QoQ to Rs. 2570 crore while net income increased marginally by 1.3 per cent QoQ to Rs. 360.4 crore. During the quarter, the company has won three large deals from new clients which aggregates to net-new TCV of ~US$100 million.

With response to these development, the stock of LTI surged to nearly 7.5 per cent to touch intra-day high of Rs. 1610. At 12.39 hours the stock was trading near to its day high at Rs. 1608.7 apiece, up by 7.3 per cent from previous close.