L&T Technology Services sees robust growth amid macroeconomic uncertainty

L&T Technology Services posted a sound set of fourth-quarter results for FY25. Despite macroeconomic uncertainty, the company has guided for double-digit revenue growth in the current financial year. This optimism stems from the robust deal pipeline of the ER&D firm. The L&T Group company also said that it is witnessing good demand in all its verticals. In a conversation with BizzBuzz, LTTS' CEO, Amit Chadha said that the company will see improvement in its margin as it has many margin levers. LTTS saw a dip in its operating margin in the fourth quarter. As far as client-specific issues are concerned, Chadha said that the company doesn't expect such issues despite macroeconomic uncertainty. He, however, said that some clients had come back for some adjustments in pricing due to tariff-induced issues. According to the company, LTTS works with several GCC clients and emphasizes this segment

Can you provide a brief overview of LTTS' performance in the fourth quarter of FY25? What went in the company's favour when many engineering services firms were posting weak results?

Our revenue in Q4 of FY25 came in at $345.1 million. There was a bit of contribution from Intelliswift, but we had a sound organic growth. If you see the numbers, mobility has more or less bottomed out. Revenue contribution from the mobility vertical came in at $100.8 million. So, unlike other companies, we were kind of flat in mobility. The year-on-year (YoY) growth in mobility vertical was sound in FY25. Sustainability (vertical) grew about 2 percent quarter on quarter (QoQ) and in the year, it has grown more than 5 per cent in constant currency terms. Tech vertical saw complementary effects playing out through both Intelliswift as well as Smart World. It grew more than 10 per cent year on year. In the first half of FY25, we made some investments, which had paid off in the second half. Moreover, we had a record deal win in the fourth quarter. We have the highest ever $10 million plus deals during this period. And we are changing our definition (in the deal space) now. $10 million is a medium deal for us and $50 million will be considered a large deal. Deals that are $100 million or more will be considered very large deals. So, we are going to officially change the terminology. So, the deal wins this quarter were the highest in our history. Moreover, around 50 per cent of these deals were in the industrial products space, which gave the highest profitability.

As far as AI (artificial intelligence) and generative AI (GenAI) are concerned, we have been expanding in AI and GenAI space. Around 190 patents have been filed in these spaces.

LTTS has guided for double-digit revenue growth in FY26, which will be better than last fiscal year. Can you provide the factors that will help in driving such revenue growth?

We are expecting double-digit revenue growth in FY26. We expect FY26 to be a better year than FY25. We are not saying we are immune to whatever happening in the tariff space in the US. Because we did have some issues in the last four or five days (of the fiscal year)when some people came and asked for assistance. We did it for our customers. Our focus is on growth. In H1 of FY25, we invested in technology and we have been able to get a record number of deals in H2. Now in the fourth quarter, some customers wanted help and we have extended help. We will be able to get larger deals as we go into FY26. Deal velocity will increase. We are also reaffirming our outlook of achieving $2 billion in annual revenue in the medium term.

What are your hiring plans for the current financial year? Will freshers be onboarded this fiscal?

We are getting 500 freshers onboarded in June and we are on track to take about 2,500 freshers throughout the year. This is higher than the previous fiscal year.

Do you expect client-specific issues to crop up due to US tariff-induced macroeconomic uncertainty? What is your perspective on this matter?

In Q1 of FY26, we are confident that mobility, sustainability, and tech- all three verticals will grow. The only thing is that Smart World, where we saw a one-time bump during the fourth quarter. That will come down in quarter one of FY26. As far as double-digit revenue growth projections are concerned, we have given these estimates based on our organic growth prospects.

How is the overall demand environment for engineering services now? Can you give a view on this matter?

There are three or four things that we are seeing in the market today, which are helping us. One is in mobility. We have launched our software-defined vehicle platform that is helping us to win deals. We won a $50 million deal just on 31st March (2025). Then, we are in talks right now with customers for several million plus deals. So, all that is going on in the mobility vertical. In the sustainability industry (vertical), we have got many deals that are above $50 million. We are currently working on those deals. There are also deals in tech. But, the larger deals, right now, are sitting in mobility and sustainability. Importantly, these are more profitable than tech. So, as the revenue mix changes, profitability will also have a positive impact.

EBIT Margin has dipped in the fourth quarter. What are the reasons for this fall? How do you see it going ahead?

Three factors impacted our margin. SWC(Smart World & Communication) had a larger share in the fourth quarter, which had a lower margin. Secondly, we had already said that because of Intelliswift coming in, there would be amortization& depreciation. Also, it is running at a different margin point. Thirdly, some customers came to us (during the fourth quarter) and asked for some support. They said, can you treat it as an investment for future work? So, we did all that. And that is why, our margins came slightly lower. But we are comfortable in confirming that our medium-term aspirations for margins of mid 16 per cent level between stands. So, we are working towards it. We have many margin levers.

What is the current engagement level with the GCC ecosystem? Can you give some perspective on this matter?

We work with them. We work with a number of GCCs right now. We continue to work with them.