This article first appeared on GuruFocus .
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Revenue:$310 million, 1.5% sequential growth, 1.9% year-on-year growth in constant currency.
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EBIT Margin:15.7%, up 50 basis points sequentially and 200 basis points year-on-year.
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Net Income:Rs. 352 crores, 1.5% sequential growth, 17.4% year-on-year growth.
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Free Cash Flow:Rs. 540 crores, 153% of net income.
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Mobility Segment Growth:2.3% sequential growth.
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Sustainability Segment Growth:4.3% sequential growth, 11.3% year-on-year growth.
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Effective Tax Rate:26%, improved by 60 basis points over the previous quarter.
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DSO (Days Sales Outstanding):Improved to 77 days from 83 days in Q4.
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Headcount:23,845, steady compared to 23,813 in Q4.
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Attrition Rate:14.7%, remained range-bound.
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Release Date: July 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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L&T Technology Services Ltd ( BOM:540115 ) reported a revenue of $310 million, showing a sequential growth of 1.5% and a year-on-year growth of 1.9% on a constant currency basis.
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The mobility segment demonstrated a recovery with a 2.3% sequential growth, driven by advancements in Aero, Rail, and Highway sectors.
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Sustainability remained a strong growth driver, achieving 4.3% quarter-on-quarter and 11.3% year-on-year growth, supported by continued deal wins and ramp-ups.
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The company achieved an EBIT margin expansion to 15.7%, up 50 basis points quarter-on-quarter and 200 basis points year-on-year.
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L&T Technology Services Ltd ( BOM:540115 ) announced a strategic partnership with Anthropic to integrate AI models across engineering processes, enhancing their engineering intelligence portfolio.
Negative Points
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The European market showed slight moderation during the quarter, impacting overall growth.
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The tech segment experienced a decline, attributed to the conclusion of a medical program and delays in new program starts.
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Other income was lower compared to the previous quarter, primarily due to foreign exchange losses.
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The offshore mix remained steady at 53.9%, indicating limited improvement in this area.
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The company faced challenges in talent acquisition for the sustainability segment, which could have supported higher growth.
Q & A Highlights
Q: What differentiates L&T Technology Services in the mobility and sustainability sectors, and why did the tech segment decline? A: Amit Chadha, CEO, explained that investments in engineering intelligence and strategic areas like EV, hybrid, and SDV have driven growth in mobility. The tech segment saw a decline due to a medical program ending and new deals moving to Q2. Alind Saxena, Executive Director, added that diversification and close client relationships are key differentiators in mobility, while AI solutions are enhancing sustainability outcomes.
Q: How is L&T Technology Services handling cash flow and DSO, and what is the outlook for free cash flow to net income? A: Rajeev Gupta, CFO, stated that the company aims to maintain free cash flow at 90-95% of net income, despite a stellar quarter with 150%. The DSO is expected to remain between 80-85 days, reflecting disciplined working capital management.
Q: Are large AI deals expected in the R&D sector, similar to IT services, and how does this affect pricing? A: Amit Chadha noted that AI is central to transformation, with large deals increasingly being fixed-price and outcome-based. The company is embedding AI in engineering processes, which could lead to pricing benefits in the medium to long term as they continue to offer differentiated services.
Q: What is the impact of geopolitical and macroeconomic factors on client conversations and decision-making? A: Amit Chadha mentioned that client conversations remain focused on market share, product viability, and AI's impact on business. Despite geopolitical tensions, the company is shielded from direct impacts, and clients are exploring ways to leverage AI for positive outcomes.
Q: How is the sustainability vertical performing, and what is the outlook for plant engineering amidst price volatility? A: Amit Chadha reported no pullback in sustainability projects despite oil price volatility. The company sees a strong pipeline and continues to hire in this area, expecting double-digit growth in sustainability for FY27, driven by AI spending and global plant expansions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
