Bengaluru-based L&T Technology Services (L&T Tech) is helping global automakers to design, develop and bring their new-generation offerings faster to market. In fact, amongst the various verticals it serves, transportation continues to be its biggest contributor accounting for almost 33.2 percent followed by Telecom & Hi-Tech (25.4%), Industrial Products (17.2%), Plant Engineering (14%) and Medical Devices (10.2%).
Interestingly, the automotive industry was expected to see major disruptions through the megatrend of ACES (Autonomous, Connected, Electric and Shared). But globally, the impact of each of these trends has varied depending on the geography. Amongst them a clear immediate trend that can be seen across is the focus on electrification, hybridisation and hydrogen fuel tech given the focus on clean transportation needs.
For its role, L&T Tech is focusing on three major areas: electrification, autonomous vehicles, and connected mobility. These areas represent “significant investments for us, including both automotive and commercial vehicles.”
India business
It is no secret that the Indian automotive sector has been one of the most cost-conscious industry. While there is some degree of inclination towards premium models, the same has not yet translated to the levels of Europe and USA. “In India, the challenge is of the perception that the entire industry is built on a value model, which is now slowly changing and evolving,” explained Chadha.
For LTTS, the focus for automotive clients is to provide high-quality solutions in a faster-to-market timeframe versus bringing the cheapest solution to the market. This is the reason that most of the company’s earlier work has focussed outside India. But it is now confident that with global automakers now looking at India for the next phase of growth, as well as Indian automakers strengthening their product portfolio to meet global standards, it will have a positive impact for LTTS’ future growth.
Growth story
It was in April 2021, Amit Chadha took over as the CEO & Managing Director and plans to significantly expand its tech prowess. “Over the past 11 quarters, we have filed 50 patents per quarter, a significant increase from our previous rate of 50 patents per year. Half of these patents are developed for customers, while the other half are for our own innovations,” he told Financial Express Online.
The company filed a total of 216 patents (L&T Tech engineers + co-authored with articles) in 2023. For 2024, the company has got 37 patents and counting.
Amongst the several steps, Chadha has taken to ensure growth, is the focus on building capabilities and focussing on partnerships. In the recent past, LTTS has been in the news for partnering with various companies like Marelli, Qualcomm, Blackberry, Amazon Web Services, Intel, Google Cloud and Nvidia among others.
Sharing his observation on the automotive industry he says “there is a significant focus on electrification, hybridisation and advancements in hydrogen fuel technology. The trend has evolved from the initial development of first-generation products to the current focus on second or third-generation products.”
To address these trends, L&T Tech has recently established a new EV lab at its Bengaluru campus. This is capable of testing commercial vehicle loads.
“Additionally, we have established an electrification prototyping lab in the US, which is currently experiencing a 2-year backlog, indicating the strong demand and interest in this area. Another significant trend is the advancement of autonomous vehicles and connected mobility towards Software Defined Vehicles (SDV). This shift emphasises the increasing importance of software in vehicle development. In response, we have formed partnerships with industry leaders such as AWS, Dell, Intel, and Blackberry to develop components and solutions, enabling us to bring products to market faster and more efficiently,” shared Chadha.
Clearly the focus has been on not only serving current needs, but also develop competencies that will provide a competitive edge for its clients.
“As we targeted 50 patents per quarter, we established an alliance organisation that assists us in forming alliances. It operates within the framework of our organisation, helping us define white spaces, determine our position, and identify the lanes we are in. We have come to realise that the world doesn’t revolve around developing software from grounds up. Numerous application packages are available for collaboration. We will continue collaborating with them and forging new alliances. The way forward is by embracing an ecosystem approach.”
“As far as mergers and acquisitions (M&A) are concerned, we acquired a company last year, achieving less than what was anticipated in our first year. Our acquisition strategy focuses on identifying targets at the right price, in the right market, and at the opportune moment. Currently, we’re seeking acquisitions in the European automotive sector and exploring potential partnerships with hyperscale and med-tech companies in the US. Our aim is to identify reasonably priced acquisitions that offer strategic advantages,” explained Chadha.
The company claims it works with OEMs and Tier 1 suppliers alike, while most of its client names has been under the wraps due to NDAs, German luxury brand BMW is amongst its prominent clients globally.
LTTS has also partnered several universities to strengthen its current and future workforce. It has committed that 50% of its staff will come from these partnered institutions.
“When I took over as CEO, we had about 15,000-16,000 employees. Now, we have grown to over 23,000 employees in just three years. During this journey, we have significantly reduced attrition rates and have established strong dedicated teams,” shared Chadha.
At present, LTTS says it has increased its women workforce from 10 percent to 22 percent in the last few years. “We are running a campaign called Women in Tech. I want more women in my workforce, and my commitment is to go up to 30%.”
