L&T Technology Services delivered disappointing Q3 results with sharper-than-expected revenue decline and reduced growth guidance, prompting multiple brokerages to cut their price targets. The engineering services firm reported consolidated net profit of ₹300.00 crore, declining 7.90% quarter-on-quarter, while facing an additional exceptional loss of ₹35.40 crore during the quarter.

Revenue Decline Exceeds Expectations

Constant currency revenue declined 2.80% quarter-on-quarter, significantly missing analyst expectations of 1.50% growth. Revenue from operations softened to ₹2,900.00 crore, reflecting the company's strategic decision not to pursue renewals in select low-margin accounts as part of its business recalibration strategy. This restructuring resulted in a revenue loss of $15 million during Q3, translating to an annualized impact of approximately $60 million.

Strong Margin Expansion Despite Revenue Pressure

Despite revenue challenges, LTTS demonstrated operational resilience with EBIT margin improving to 14.60%, ahead of analyst estimates of 13.70%. The margin expansion was driven by the company's strategic pivot towards profitability over scale, including the deliberate exit from low-margin contracts. Management now aims to achieve 16.50% margins earlier than the previously guided timeline of Q4 FY27 to Q1 FY28.

Revised Growth Guidance Signals Strategic Shift

LTTS significantly recalibrated its growth outlook, reducing FY26 constant currency revenue growth expectation from double digits to mid-single-digit growth. This revision reflects the company's 'Lakshya' strategy, which prioritizes margin improvement over topline expansion. The portfolio rationalization under this strategy has resulted in the company opting not to renew certain low-margin contracts both within and outside its software and services business.

Brokerage Reactions and Price Target Cuts

Multiple brokerages responded negatively to the results, cutting price targets citing weak near-term growth prospects. HSBC maintained its 'Hold' rating but reduced the price target to ₹4,745, noting that the revised guidance implies organic revenue decline in FY26. The brokerage questioned the benefits of recalibration given unchanged medium-term margin targets.

Nomura retained its 'Reduce' rating with a price target of ₹3,900, estimating the restructuring impact at around 5% of the business. However, it acknowledged strong deal wins and robust pipeline, expecting EBIT margins to recover steadily over FY26-28.

JPMorgan maintained 'Neutral' rating with ₹4,650 price target, highlighting the sharp revenue miss and guidance cut while noting that margin recovery is already underway.

Market Performance and Outlook

Shares of LTTS are expected to open lower following the results announcement. The stock settled 1.69% lower at ₹4,245 and is down 3% in 2026. The company currently trades at around 29 times FY27 earnings, with analysts noting that stronger-than-expected growth and margin improvement would be key upside risks. Despite near-term challenges, the company maintains a strong deal pipeline with multiple large deals in various stages, demonstrating continued client confidence in LTTS capabilities.

L&T Technology Services Limited has announced the superannuation of a senior management personnel, marking a significant leadership transition at the engineering and technology services company. The disclosure was made in accordance with regulatory requirements governing senior management changes.

Senior Management Transition

Ms. Seema Ghanekar, who served as Chief Segment Officer - Communications, Media, and Technology, has superannuated from the company's services effective from the close of business hours on December 31, 2025. The announcement was made through a formal disclosure to the stock exchanges as part of the company's compliance obligations.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company filed the necessary documentation with both the National Stock Exchange of India Limited and BSE Limited, ensuring full compliance with regulatory requirements for senior management personnel changes.

The announcement was signed by Prasad Shanbhag, Company Secretary & Compliance Officer, and submitted to the exchanges on December 31, 2025. The disclosure included detailed annexures as required under SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

Company Information

L&T Technology Services Limited operates from its registered office at L&T House, N. M. Marg, Ballard Estate, Mumbai, and maintains its corporate office at A.M. Naik Tower in Powai, Mumbai. The company functions as a subsidiary of Larsen & Toubro Limited and trades on stock exchanges under the symbol LTTS on NSE and scrip code 540115 on BSE.

The superannuation represents a routine senior management transition as Ms. Ghanekar concludes her tenure in the Communications, Media, and Technology segment leadership role at the company.