L&T Technology Services registers 24% revenue growth in Q2FY23, announces dividend

Larsen & Toubro Limited’s engineering, research and development subsidiary, L&T Technology Services Limited (LTTS), on Tuesday announced a 24.1% year-on-year (YoY) growth in its rupee revenue, which rose to ₹1,995 crore in Q2FY23. The company’s net profit reached ₹282.4 crore, up 22.8% YoY.

The LTTS board also declared an interim dividend of ₹15 per share, with a record date of October 28.

Shares of LTTS ended 2.3% higher at ₹3,670 apiece on Tuesday, ahead of the company announcing its financial results for the September quarter. The 30-company BSE Information Technology index closed 0.67% higher at ₹28,536.93.

Amit Chadha, managing director and chief executive officer of LTTS, said that the company has outperformed its targets for FY23, revising its constant currency dollar revenue growth guidance to 15.5-16.5% for the financial year. In its June quarter results, LTTS had pegged it at 13.5-15.5% for the year.

“We have achieved a $1 billion annualised revenue run-rate in Q2 on constant currency basis. Our momentum stayed strong in the second quarter with revenue growing sequentially by 4.5% in constant currency. Investments into our electric autonomous connected vehicles (EACV) bet has helped us win large deals consistently,” Chadha said.

Explaining its deals signed during the quarter, LTTS said that it won two deals with total contract value (TCV) of $10 million or higher, with its largest deal signed during the quarter bearing TCV of above $60 million. Chadha said that this marked the third quarter in a row in which LTTS signed deals with TCV of between $50-100 million in the transportation segment.

One of its deals include a five-year contract with German automotive major BMW Group, “to provide high-end engineering services for the company’s suite of infotainment consoles targeted for its family of hybrid vehicles,” the company said in its note to investors.

Chadha added that the company registered a record high in deals booked in Europe. “There is strong demand for digital manufacturing services, with programs being initiated around factory automation and digital twins, enabling quick return on interest to our industrial products and plant engineering customers,” he said.

LTTS’ transportation business grew 25.2% YoY to contribute 34.5% of its quarterly revenue. Plant engineering, which includes industrial automation services, registered the second highest annual growth of 20.8% — accounting for 16.3% of the company’s revenues, LTTS said in its investor note.