LTT trades at 14.3x FY19E, which is nearly in-line with midcap IT valuations (midcap IT PEG at 0.9x vs LTT at 1x). Initiate with NEUTRAL and TP of Rs 805, implying 15x FY19E. L&T; Tech (LTT) is a pure-play ER&D; company, at 37% of HCLTs ER&D; size and 20% of Altran (largest global ER&D; provider). LTT will benefit from increasing ER&D; outsourcing (currently only 22% penetration), based on (1) Diversified vertical mix, (2) Business de-risked from client concentration (lowest top-10 revenue share vs peers at 35%), (3) Large mining potential, with 45 clients from the global top-100 R&D; spenders, (4) Favourable offshore mix and high revenue productivity, as compared to Indian ER&D; peers (8/30% higher than Cyient/Tata Elxsi), (5) Margin levers such as utilisation (+400bps scope), fixed price and IP-revenue.