L&T Technology Services (LTTS) reported a 2.2% quarter-on-quarter (q-o-q) rise in its net profit to Rs 368 crore in the June quarter of FY24, from a net profit of Rs 360 crore in the March quarter. The IT firm posted a revenue of Rs 2,301 crore in Q1FY24, down 2.9% sequentially. The March quarter revenue for the company was at Rs 2,371 crore.
Amit Chadha, CEO and MD, LTTS, said, “We had a quarter of strong deal wins across all five segments, the highlight being a $50-million-plus deal in telecom and hitech. Our customers continue to spend on transformational technologies and seek ER&D (engineering research and development) partners who can deliver innovation, speed-to-market and cost synergies.”
The earnings before interest and taxes (Ebit) for the company was at Rs 395 crore for the June quarter, compared with Rs 423 crore in the March quarter of FY23. The Ebit margin fell from 17,9% in March quarter to 17.2% in the June quarter.Speaking about the fall in margins, Chadha added that the acquisition of Smart World and Communication was the reason for a fall in margins. “We had estimated before the acquisition that we would go down by 200 bps in Ebit,” he said.
Speaking about the decline of 4.5% q-o-q in revenue in the plant engineering vertical, Chadha said, “In plant engineering, there were some decisions that got delayed in terms of inputs of live projects. Therefore, we have seen some decline in that vertical.” The company closed the acquisition of Smart World and Communication (SWC) on April, 1, 2023.He added that every other vertical has grown, except the plant vertical, which is just a one-off drag. The company also saw its India revenue decline by 19.7% sequentially.
LTTS is also planning to hire about 750 employees in the second quarter. The total headcount at the end of June quarter was 23,392.Attrition came down to 18.9% in June quarter from 22.2% in the last quarter of FY23. Chadha added that variable pay has been given based on achievements to employees and the company has already started to roll out increment letters effective July 1 of this year.