LTTS - L&T Technology

📊 NSE: LTTS 🏢 Computers - Software - Large 📅 Last Updated: 12/14/2025 9:09

💰 Financial Performance

Revenue Growth by Segment

Overall revenue grew 10.6% YoY in FY25 to INR 10,670.1 Cr. In Q2 FY26, revenue was INR 2,979.5 Cr, up 15.8% YoY and 4.0% QoQ. Constant currency growth in Q2 FY26 was 10.4% YoY. Segment-specific growth was supported by Sustainability and Tech, while Mobility faced a subdued demand environment in the Automotive sector.

Geographic Revenue Split

Not explicitly disclosed in percentages by region, but the company monitors concentration across geographies and customers to manage risks. Revenue is primarily driven by global ER&D spending patterns in markets including the U.S. and South America.

Profitability Margins

Operating margins have shown a declining trend: 18.3% (FY22), 17.3% (FY23), 17.1% (FY24), and 14.9% (FY25). Q2 FY26 EBIT margin stood at 13.4%, while Net Income margin was 11.0% (INR 328.7 Cr). Margins were impacted by higher operating leverage and acquisition-related integration expenses.

EBITDA Margin

EBITDA for Q2 FY26 was INR 490.8 Cr, representing a 6.1% increase QoQ. The 9M FY25 operating margin moderated to 18.4% from 19.9% in the previous year due to integration costs and shifting market dynamics.

Capital Expenditure

Capital spending is expected to remain moderate and funded through cash accruals. LTTS maintains a debt-free balance sheet with a cash surplus of INR 3,290 Cr as of December 2024. Maintenance capex is limited.

Credit Rating & Borrowing

Crisil Ratings maintains a strong profile with LTTS being net debt-free. Interest coverage ratio was 195.36 in FY24. Borrowing is minimal, primarily consisting of finance lease liabilities of INR 644 Cr as of September 2024.

⚙️ Operational Drivers

Raw Materials

Not applicable as LTTS is a service-based Engineering Research and Development (ER&D) company; its primary 'input' is human capital and intellectual property.

Import Sources

Not applicable; services are delivered through a global delivery model with 56.4% offshore mix in Q2 FY26.

Key Suppliers

Not applicable; however, the company partners with technology providers like NVIDIA, SiMa.ai, and hyperscalers for its technology backbone.

Capacity Expansion

Expansion is driven by headcount and specialized centers. LTTS operates an Offshore Development Center (ODC) for product lifecycle management and is building a centralized Data Factory for a global pharmaceutical leader.

Raw Material Costs

Not applicable; however, 'Cost of Sales' for Q2 FY26 was INR 2,146.2 Cr, which includes employee compensation and project-related expenses.

Manufacturing Efficiency

Offshore delivery mix improved to 56.4% in Q2 FY26. Time & Material (T&M) revenue mix was 61.9%.

Logistics & Distribution

Not applicable.

📈 Strategic Growth

Expected Growth Rate

10%+

Growth Strategy

Growth will be driven by the 'Go Deeper to Scale' strategy focusing on Mobility, Sustainability, and Tech. The company is investing in Agentic AI and has a medium-term revenue target of USD 2 Billion. Growth is supported by a record TCV of near-USD 300 million in Q2 FY26, including a $100M deal in Sustainability and a $60M deal in Tech.

Products & Services

Engineering Research and Development (ER&D) services, Software Product Development, Platform Engineering, Digital Integration, Data and AI solutions, and Intelligent Well services for oilfields.

Brand Portfolio

L&T Technology Services (LTTS), Intelliswift (acquired).

New Products/Services

Agentic AI solutions and license-based revenue, which now contributes 1% of trailing 12-month revenue.

Market Expansion

Expansion into Software Product Development and Platform Engineering via the USD 110 million acquisition of Intelliswift. Targeting deepwater pre-salt fields in South America and global pharmaceutical data management.

Market Share & Ranking

Positioned as a leader in the global ER&D market; specific percentage ranking not disclosed.

Strategic Alliances

Partnerships with SiMa.ai, NVIDIA, MIT Media Lab, and various hyperscalers to ensure a future-ready technology backbone.

🌍 External Factors

Industry Trends

The ER&D industry is evolving with the emergence of breakthrough technologies like AI and a growing emphasis on ESG. LTTS is positioning itself by integrating AI into its core offerings and targeting the Sustainability segment, which saw 28.1% margins in Q2 FY26.

Competitive Landscape

Competes in the global engineering services market against other specialized ER&D and IT service providers.

Competitive Moat

Moat is built on the 'L&T' brand, engineering domain expertise, and strong parentage (L&T holds 73.6%). The relationship provides access to shared managerial and infrastructure resources, which is highly sustainable due to the strategic importance of LTTS to the L&T group.

Macro Economic Sensitivity

Sensitive to global ER&D spending patterns and macroeconomic uncertainty, which can lead to cost-reduction initiatives by clients.

Consumer Behavior

Shift toward sustainable engineering and AI-driven product development is increasing demand for LTTS's specialized services.

Geopolitical Risks

Geopolitical challenges, tariffs, and trade restrictions impact global supply chains and client spending.

⚖️ Regulatory & Governance

Industry Regulations

Adheres to local laws in multiple jurisdictions, particularly regarding immigration, data protection (GDPR/DPDP), and cybersecurity. Uses an in-house tool to monitor rules across all operating regions.

Environmental Compliance

LTTS has integrated climate and ESG risk assessments into its ERM function. It focuses on water neutrality, carbon-neutral emissions, and biodiversity enhancement.

Taxation Policy Impact

Compliant with Indian Accounting Standards (Ind AS) and the Companies Act, 2013.

Legal Contingencies

Not disclosed in specific INR values, but the company emphasizes adherence to local laws to avoid fines, penalties, and reputational damage.

⚠️ Risk Analysis

Key Uncertainties

Macroeconomic volatility and geopolitical unpredictability are primary risks. A deterioration in the credit profile of the parent (L&T) or a large debt-funded acquisition could negatively impact ratings.