This article first appeared on GuruFocus .
Release Date: July 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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LTM Ltd ( BOM:540005 ) reported a year-over-year revenue growth of 6.4% in constant currency terms, indicating strong performance.
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The company's EBIT margins improved by 40 basis points sequentially to 15.5%, showcasing operational efficiency.
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LTM Ltd's AI revenue across creative, industrial, and business AI contributed approximately $150 million on a quarterly run rate basis.
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The order book remains stable at $1.7 billion, including two large deal wins, reflecting strong deal momentum.
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The company received several industry recognitions, including the Golden Peacock Award for Excellence in Artificial Intelligence 2026, highlighting its leadership in AI adoption.
Negative Points
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The consumer segment experienced a sequential decline of 0.7%, attributed to delayed ramp-ups and projects in India and the Middle East.
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Production segment reported a decline of 5.7% due to seasonal pass-through falloff, indicating volatility in certain segments.
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The company's OCF to PAT ratio decreased to 79% from 96% in the previous quarter, indicating a decline in cash flow efficiency.
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There was an increase in subcontractor usage, rising by 130 basis points QoQ and 320 basis points YoY, which may impact cost management.
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The geopolitical situation in the Middle East poses potential risks, although it currently accounts for less than 3% of revenue.
Q & A Highlights
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Warning! GuruFocus has detected 3 Warning Signs with BOM:540005.
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Q: Can you provide insights into the business momentum for Q2, considering the seasonal pass-through and macro-related headwinds in the Middle East? A: Venu Lambu, CEO: The positive news is that our major segments are on a growth trajectory, and I expect this to continue into the next quarter. Unless there are unforeseen geopolitical escalations, the rest of the market segments should maintain their growth momentum.
Q: There has been a moderation in sales headcount over the last year. Is this due to efficiencies or actions in specific geographies? A: Venu Lambu, CEO: The reduction is related to enabling functions and support roles. We are embracing AI for internal operations, which has led to productivity benefits across IT, finance, HR, and other support functions.
Q: What is the nature of demand being served by subcontractors, given the increase in subcontractor costs? A: Venu Lambu, CEO: The increase is due to vendor consolidation exercises with some clients, where we transition tail vendors to become part of a leading vendor. This is a temporary spike and not indicative of a long-term trend.
Q: Can you comment on the consumer segment's performance and whether the drag will continue in future quarters? A: Venu Lambu, CEO: The consumer segment grew 18.2% year-over-year. The quarterly decline was due to delayed ramp-ups and shipments, but I expect this trend to reverse as shipments accelerate.
Q: How do you view the growth in North America, and do you expect the momentum to continue? A: Venu Lambu, CEO: Our Tech and Services segment, which is heavily North America-centric, grew 3.4% sequentially. Financial services are also back to sequential growth, showing strong demand traction. I am optimistic about continued momentum in North America.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
