L&T Technology Services on Thursday reported a rise in earnings for both revenue and profit due to strong performance in areas such as telecom & hitech, and plant engineering, although the results did not meet market expectations. The company expects revenue growth between 8-10% for the fiscal year 2025.
Consolidated revenue increased by 4.4% quarter-over-quarter to Rs 2,537.50 crore in the January-March period, while profit rose by 1.4% sequentially to Rs 340.9 crore. However, these figures fell short of Bloomberg’s projections of Rs 2,546 crore and Rs 348 crore, respectively.
Amit Chadha, CEO of L&T Technology Services, told FE in an interaction, “We’ve delivered 1,300 crore of PAT and we were at 1,000 crore PAT two years ago in FY22. It’s been a 25% CAGR over the last three years in terms of profits and 16% CAGR in terms of revenue. So, profits have gone up faster and higher than our revenue”.
Despite these gains, the company’s operating margin — earnings before interest and tax — dropped by 30 basis points quarter-over-quarter to 16.90% in the January-March period.
Regarding the margin, Chadha explained, “We’ve consistently aimed for about a 17% margin this year, which we achieved. Some investments we’ve made kept us within that range, aligning with our guidance”.
DEAL WINS
The engineering services company in Q4 signed its first ever $100 million deal in cybersecurity. Additionally, in the quarter the company bagged a $30 million, two deals each of $20 million and a $10 million project.
L&T Tech has about 100 proof of concept deals which are embeded with artificial intellegence. “We’ve got about 100 POCs running, 2 large-scale projects running. Out of the 100 POCs, 50% are paid, 50% are unpaid. We’ve got 3,500 people trained in this area,” Chadha said.
Moreover, the company recorded sequential revenue increases across its sectors, except for industrial products and medical devices. Revenue from its largest sector, transportation, grew by 1.2% for the quarter ending in March and by 11.5% for the fiscal year 2024.
“Industrial products and medical devices for FY25 also will be slightly lower. Not decline, but the growth will be slightly lower than others. I do expect transportation to be double digits,” Chadha said.
He also noted that the company is gaining market share in the hitech vertical. Revenue from the company’s telecom & hitech rose nealry 21% quarter-on-quarter in constant currency.
Further, the company is also restructuring its sectors. “We’ve created our companies into three by three. So, I do expect mobility to be growing. I do expect sustainability to be growing, powered by plant engineering. And I expect parts of high-tech to be growing, powered by cyber and software-defined everything and semiconductors,” he said.
The company plans to hire between 1,500 and 2,000 fresh graduates in FY25 and will continue its campus recruitment efforts.
