L&T Technology Services Limited (LTTS) is a listed subsidiary of Larsen & Toubro Limited focused on Engineering and R&D (ER&D) services. The company offers consultancy, design, development and testing services across the product and process development life cycle. Its customer base includes 69 Fortune 500 companies and 57 of the world’s top ER&D companies, across industrial products, medical devices, transportation, telecom & hi-tech, and the process industries. Headquartered in India, it has over 23,300 employees spread across 22 global design centers, 28 global sales offices, and 102 innovation labs as of June 30, 2023.

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    Result Analysis: L&T Technology Services Limited (CMP: Rs.4063.55) Result Update: Q1FY24
    Stock Details
    Market Cap. (Cr.) 42938.63
    Equity (Cr.) 21.13
    Face Value 2
    52 Wk. high/low 4317 / 3076
    BSE Code 540115
    NSE Code LTTS
    Book Value (Rs) 468.54
    Sector IT – Software


    Key Ratios
    Debt-equity: 0.10
    ROCE (%): 33.41
    ROE (%): 25.77
    EPS TTM: 107.85
    P/BV: 8.67
    P/E TTM: 37.68

    Result Highlights:

    • The company reported a marginal decline in revenue of 2.9% QoQ to Rs.2,301cr. and an 8.6% QoQ de-growth in net profit to Rs.312 cr. The primary factor contributing to this performance was the delay in deal closures.

    • EBIT Margin of the company also declined by 70 bps QoQ in the quarter and stands at 17.2%, mainly due to investments in big deals and SWC’s (Smart World & Communication) lower margin profile.

    • Among segments, transportation grew by 3.94% QoQ driven by widespread expansion in the auto, trucks, off-highway, and aviation sectors. Industrial Products, and medical devices grew 0.37%, 0.73% QoQ respectively, Telecom & Hi-tech contracted by 12.78% QoQ, due to weak seasonality impact from SWC business unit and weakness in the semiconductor segment, plant engineering de-grew by 4.42% QoQ.

    • Across geographies, America & Europe grew 3.2%, 2.8% QoQ respectively, and India & ROW declined by 19.7% and 1.5% QoQ respectively.

    • There was one significant agreement for more than $50 million (Hi-tech deal) in the QIFY24, and five deals with TCVs of at least $10 million were also successful. Recently, LTTS and Palo Alto Networks teamed together to offer operations technology (OT) and cyber security services to businesses.

    • In Q1, The headcount was 23.4K, with a net addition of 318 workers. Attrition significantly decreased and was 18.9% (Q4FY23: 22.2%). In the upcoming quarters, LTTS anticipate a downward trend.

    • On April 1, 2023, LTTS has fully acquired L&T’s Smart World & Communication (“SWC”) business. The purchase has been accounted for in accordance with Ind AS 103, “Business Combinations,” Appendix C, at the carrying value of the assets and liabilities of the SWC, and the financial statements for the Q1FY23, the Q4 FY23, and FY23 have been restated.

    Financial Performance:


    L&T-tecFinancial Performance

    Shareholding Pattern:

    Particulars (In %) Q4FY23 Q1FY22
    Promoters Group 73.85 73.88
    FIIs 7.64 7.02
    DIIs 8.64 4.09
    Public 9.33 13.95
    Others 0.54 1.09

    Management Commentary:

    Commenting on the June quarter results, Amit Chadha, CEO and MD said, “We had a quarter of strong deal wins across all five segments, the highlight being a $50M plus deal in Telecom and Hitech. The early wins and critical partnerships with telecom service providers, equipment manufacturers and cyber security providers will create a robust foundation for our future growth. Our investments into emerging technology areas like AI, Software Defined Vehicle (SDV) and cybersecurity continue to help us engage with customers on ways to prioritize strategic spends and increase market agility.”



    L&T Technology Services Limited (LTTS) reported subdued financial performance for the quarter. The management cited slower decision-making and an increase in client approvals as factors that delayed transaction close and adversely affected Q1 results. However, the firm is currently supported by significant transaction wins from the first quarter, all prepared to enroll more than 750 resources, and salary increases would take effect in July 23. LTTS’s long-term growth narrative is still on track, thanks to its excellent profit profile and strong engineering skills. However, the increased discretionary nature of the company, together with global economic worries, will have an impact on LTTS’s growth.



    Particulars (In Rs. Cr.) Q1FY24 Q4FY23 Q1FY23 QoQ%      YoY%
    Revenue from Operations 2,301 2,371 2,006 -2.9% 14.7%
    Other Income 48 50 41 -5.4% 16.9%
    Total Income 2,349 2,421 2,047 -3.0% 14.8%
    Employee Benefit Expenses 1,215 1,185 1,084 2.6% 12.1%
    Employee benefit Expenses as % of Sales 52.8% 50.0% 54.0% 280 bps -120 bps
    Depreciation & Amortisation Expense 57 57 59 0.9% -2.7%
    Other Expenses 634 706 514 -10.2% 23.2%
    EBIT 395 423 349 -6.6% 13.4%
    EBIT Margin 17.2% 17.9% 17.4% -70 bps -20 bps
    Profit After Tax (PAT) 312 341 276 -8.6% 13.0%
    PATM (%) 13.6% 14.4% 13.8% -80 bps -20 bps
    EPS (in Rs.) 29.45 32.21 26.09 -8.6% 12.9%
    Segment Revenue (In Rs. Cr.) Q1FY24 Revenue % Q4FY23 QoQ% Q1FY23 YoY%
    Transportation 753 32.7% 724 3.94% 622 21.05%
    Plant Engineering 320 13.9% 335 -4.42% 301 6.42%
    Industrial Products 406 17.6% 404 0.37% 355 14.21%
    Medical Devices 236 10.2% 234 0.73% 214 10.35%
    Telecom & Hi-tech 587 25.5% 674 -12.78% 515 14.06%
    Total 2,301 100.0% 2,371 -2.92% 2,006 14.71%
    Geography Revenue % Q1FY24 Q4FY23 Q1FY23 QoQ YoY
    North America 58.70% 53.20% 56.50% 3.20% 5.10%
    Europe 15.40% 14.50% 15.40% 2.80% 9.40%
    India 19.00% 25.00% 20.70% -19.70% 18.40%
    Rest of the World 6.90% 7.30% 7.40% -1.50% 16.20%
    Source: Company website, EWL Research

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