L&T Technology Services (LTTS) IPO, which is going to hit capital markets on September 12 (Monday), has got thumbs up from brokerage firm Angel Broking. L&T Technology Services is a subsidiary of engineering conglomerate Larsen & Toubro (L&T) and was incorporated in June 2012. Post transfer of Product Engineering Services (PES) and Integrated Engineering Services (IES) division and 2 acquisitions in 2014-15, LTTS emerged as leading pure play engineering research and development (ER&D) player. The public offer will close on September 15 (Thursday). The company has fixed the price band of its upcoming IPO at Rs 850-860 per share. Below are 5 reasons why Angel Broking is bullish on L&T Technology Services IPO: 1) LTTS trades at 21 times 2015-16 earnings per share (EPS) at upper-end of issue price band. On considering strong growth potential of LTTS, which is ahead of some of the industry peers, coupled with over 38 per cent return on equity levels in FY2016, FY2015-16 average cash flow from operations of Rs 446 crore and, strong dividend payout, Angel Broking believes LTTS stock has the potential to trade at premium to the peers. 2) LTTS stocks have been priced at 19 per cent discount as compared with the 3 peers. 3) The company is a leading global pure-play ER&D company is likely to benefit from under-penetration and expected increase in India\u2019s market share in outsourced ER&D space. 4) LTTS has been carved out of L&T\u2019s IES and L&T Infotech\u2019s PES division in 2014. If we just take segmental revenues from both entities, before LTTS was carved out, then LTTS reported 23.1 per cent revenue CAGR (compounded annual growth rate) during FY2013-16 to Rs 3,066cr. This growth is after reducing Rs 111 cr of revenues in 2015-16 for some non-performing accounts. LTTS is pursuing multi-pronged growth approach, which could possibly drive the earnings growth, going forward. 5) Over the next few years, top 100 ER&D spending is expected to grow in to a large market opportunity for LTTS.