L&T Technology Services’ Q2 FY25 results reveal double-digit growth potential as AI and sustainability deals soar

L&T Technology Services Limited, a leading global engineering and technology services firm and a subsidiary of Larsen & Toubro Limited, reported an 8% year-on-year growth in its revenue for the second quarter of FY25, amounting to ₹25,729 million. The company’s net profit reached ₹3,196 million, marking a 1.3% increase compared to the same period last year.

The company’s latest financial disclosure revealed that its revenue in US dollars also saw a rise, hitting $307 million—a 6.5% increase YoY. Notably, L&T Technology Services Limited (LTTS) maintained a stable EBIT margin of 15.1%, reinforcing its position as a profitable player in the engineering services sector.

Ambitious Targets and Brand Positioning

CEO Amit Chadha expressed confidence in LTTS’s strategic growth initiatives, which focus on scaling its three core segments: Mobility, Sustainability, and Technology. Chadha highlighted LTTS’s new brand positioning—’Purposeful. Agile. Innovation.’—as a pivotal move to achieve standalone billion-dollar revenue in each segment. The company’s strategy, ‘Go Deeper to Scale,’ launched earlier this year, has already yielded significant results, especially in the sustainability segment, which grew by 6.5% in Q2 FY25. Mobility also showed promise, with a 5% growth driven by its software-defined vehicles (SDV) and hybridisation services.

Key Deals Fueling Growth

The quarter saw LTTS secure several substantial deals, including two USD 20 million contracts and four USD 10 million Total Contract Value (TCV) agreements. The company also closed two notable empanelment deals in the sustainability sector. These achievements demonstrate the effectiveness of LTTS’s strategic focus on sustainability and AI-led solutions, which are rapidly gaining traction in the global market. LTTS has filed 165 patents in AI to date, underscoring its commitment to innovation.

Expert Insight on LTTS’s Market Position

Industry analysts note that LTTS’s diversified service offerings and strong client base—comprising 69 Fortune 500 companies and 57 top engineering and research & development firms—are critical to its sustained growth. According to sector experts, LTTS’s recent wins in the sustainability and mobility segments are likely to bolster its revenue streams further, particularly as global demand for sustainable and AI-powered engineering solutions rises.

The company’s announcement of an interim dividend of ₹17 per share with a record date of October 25, 2024, further reflects its robust financial health and shareholder value focus.

Share Price Movement and Sentiment Analysis

Listed under the symbol ‘LTTS’ on both the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), LTTS’s share price remained stable following the Q2 results announcement. The stock traded at ₹4,635, indicating a positive market sentiment backed by strong quarterly performance and optimistic future guidance. Analysts suggest that LTTS’s focus on large deals and strategic investments in digital engineering and AI solutions may drive further stock appreciation in the coming quarters.

Recognitions and CSR Initiatives

LTTS also received notable industry accolades, including the 2024 Caterpillar Supplier Excellence Award and recognition as a top partner in John Deere’s Achieving Excellence Program. The company’s Corporate Social Responsibility (CSR) activities, such as the ‘Sampoorna Poshan’ initiative focused on maternal and child healthcare, were also awarded, highlighting its commitment beyond business growth.

Outlook and Forecast

LTTS reaffirmed its guidance for 8-10% revenue growth in constant currency for FY25, with a medium-term goal of $2 billion revenue and an EBIT margin of 17-18%. The company’s strategic investments in its core segments are expected to drive broad-based growth, supported by an increasing number of AI-driven contracts and sustainability-focused deals. With a diversified client portfolio and a growing presence in key markets such as North America and Europe, LTTS remains well-positioned to capitalize on global engineering and technology trends.