L&T Technology Services (LTTS), a leading pure-play engineering services company, has set its sights on achieving double-digit growth in the fiscal year 2026 while aiming to reach the $2 billion revenue milestone in the near future. The company's ambitious targets come on the heels of a robust performance in the first quarter of FY26.

Strong Q1 Performance

LTTS reported impressive financial results for Q1 FY26:

• Revenue stood at ₹2,866.00 crore, marking a 16.40% year-on-year growth
• USD Revenue reached $335.30 million, up 13.60% year-on-year
• Net profit increased to ₹316.00 crore, showing a 0.70% year-on-year growth
• EBIT margin was maintained at 13.30%

Large Deals Momentum

The company continued its strong momentum in large deals, securing several significant contracts in Q1:

• One deal worth $50 million
• Three deals in the $20-30 million range
• Six deals valued at $10+ million each

This marks the third consecutive quarter where LTTS has exceeded $200 million in Large Deals Total Contract Value (TCV).

Segment Performance

LTTS's multi-segment diversification strategy has proven resilient:

Focus on AI and Innovation

Amit Chadha, CEO and Managing Director of LTTS, highlighted the company's emphasis on AI and automation:

• LTTS engineers have deployed multiple AI programs for clients
• The company has filed 206 patents in the AI domain
• LTTS is launching PLxAI, a proprietary AI framework to accelerate product development lifecycles for global clients

Strategic Expansion

To meet increasing demand in key areas, LTTS has:

• Opened a new design center in Plano, Texas, focusing on cutting-edge technologies, cybersecurity, and AI
• The center is expected to create over 350 high-skilled jobs

Outlook

Despite some challenges in specific tech subsectors and global macroeconomic factors affecting the Mobility segment, LTTS remains optimistic about its future:

• The company expects to see an improvement in EBIT margins in the coming quarters
• LTTS is confident in achieving double-digit growth in FY26
• The medium-term outlook of reaching $2 billion in revenue remains intact

As LTTS continues to leverage its multi-segment strategy, focus on innovation, and expand its global footprint, the company appears well-positioned to navigate the dynamic market environment and achieve its ambitious growth targets.

L&T Technology Services Limited (LTTS), a leading pure-play engineering services company, has reported a mixed set of financial results for the first quarter. The company faced headwinds in revenue growth but managed to improve its profitability, while also experiencing an increase in attrition rate.

Revenue Performance

LTTS reported a revenue of ₹2,866.00 crore, marking a 3.90% quarter-on-quarter (QoQ) decline from ₹2,982.00 crore in the previous quarter. The QoQ decline in revenue was primarily attributed to seasonality in a specific Tech subsector and global macroeconomic challenges affecting the Mobility segment.

Profit and Margins

Despite the revenue dip, LTTS saw an improvement in its bottom line. The company's consolidated net profit rose to ₹316.10 crore from ₹311.00 crore in the previous quarter, representing a 1.64% increase QoQ.

The EBIT (Earnings Before Interest and Taxes) for the quarter stood at ₹381.00 crore, down from ₹394.00 crore in the previous quarter, showing a 3.30% decline. However, the EBIT margin slightly improved to 13.30% from 13.21% in the previous quarter, indicating the company's ability to manage costs effectively in a challenging environment.

Segment Performance

LTTS operates across three main segments:

1. Mobility: Revenue declined by 1.50% QoQ but saw a 4.40% YoY decrease.
2. Sustainability: This segment showed resilience with a 4.10% QoQ growth and a 16.40% YoY increase.
3. Tech: Experienced the most significant impact with an 8.50% QoQ decline, but still managed a 29.40% YoY growth.

Deal Momentum and Future Outlook

Despite the revenue challenges, LTTS maintained strong deal momentum. The company reported several new deal bookings, including:

• One deal worth USD 50 million
• Three deals in the USD 20-30 million range
• Six deals worth over USD 10 million each

This marks the third consecutive quarter where LTTS exceeded USD 200 million in large deals Total Contract Value (TCV).

Strategic Initiatives

LTTS is focusing on AI and automation to drive future growth. The company has deployed multiple AI programs for clients and filed 206 patents in this domain. Additionally, LTTS is launching PLxAI, a proprietary AI framework designed to accelerate product development lifecycles for global clients.

To cater to increasing demand in specific areas, LTTS opened a new design center in Plano, Texas, specializing in advanced technologies, cybersecurity, and AI.

Management Commentary

Amit Chadha, CEO and Managing Director of LTTS, expressed confidence in the company's strategy and future prospects. He stated, "Backed by an increased order book and a focus on resilience and profitable growth, we expect to clock double-digit growth in FY26 and maintain our medium-term outlook of USD 2 billion revenue."

Workforce Dynamics

LTTS reported an increase in its attrition rate, which rose to 14.8% in Q1FY26 from 14.3% in Q4FY25. Simultaneously, the company's total employee headcount decreased by 630, bringing the total number of employees to 23,626. This reduction in workforce size may be part of the company's efforts to optimize costs and improve operational efficiency in the face of challenging market conditions.

Conclusion

While L&T Technology Services faced some short-term challenges in Q1, particularly in revenue growth and increased attrition, the company's improved profitability, strong deal pipeline, and strategic focus on emerging technologies position it well for future growth. The management's optimistic outlook and continued investment in key areas suggest that LTTS is adapting to market dynamics and preparing for long-term success in the engineering services sector. However, the company will need to address the rising attrition rate and manage its workforce effectively to ensure sustainable growth and maintain its competitive edge in the industry.