L&T Tech Services Q2 Results: L&T Technology Services announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Wednesday, October 16, reporting a rise of 1.3 per cent in consolidated net profit at ₹319.6 crore over narrower profit margins, compared to ₹315.4 crore in the corresponding period last year.
The engineering services player's revenue from operations in the second quarter of the current fiscal rose 7.8 per cent at ₹2,573 crore, compared to ₹2,386.5 crore in the year-ago period, helped by an over 24 per cent growth in the European market driven by demand from the automobile sector and sustainability-focused solutions.
The subsidiary of engineering, procurement and construction major Larsen & Toubro (L&T) also announced an interim dividend of ₹17 per share and fixed the record date for the same as Friday, October 25, 2024.
"The board of directors have also declared an interim dividend of Rs. 17/- per equity share. The dividend shall be paid to equity shareholders of the company whose names will appear in the register of members or in the records of the depositories as beneficial owners of shares as of Friday, October 25, 2024, which is the record date fixed for the aforesaid purpose," said L&T Tech Services in a regulatory filing to the stock exchanges.
During the quarter, L&T Tech Services two $20 million and four $10 million total contract value (TCV) deals. Additionally, the company won two significant empanelment agreements in sustainability. L&T Tech Services has bagged large deals from auto parts maker Forvia and energy giant Shell in the last few quarters, aiding its revenue growth.
The L&T group firm reaffirmed its full-year 2025 revenue growth forecast of 8-10 per cent. Higher spending on sales and technology narrowed the operating profit margin to 15.1 per cent during the reporting quarter, as against 17.1 per cent in the year-ago period and 15.6 per cent quarter-ago.
“We had strong sequential growth of four per cent in Q2 led by sustainability at 6.5 per cent on the back of earlier large deals and empanelment agreements. Mobility also had a strong showing with five per cent growth driven by our differentiated story on SDV and hybridization,” said Amit Chadha, CEO & Managing Director, L&T Technology Services.
“We are seeing an uptick in AI-led deal conversations, and our portfolio of AI solutions and accelerators is helping win deals in our focus areas across segments. To date, we have filed 165 patents in AI. With our pipeline comprising larger sized deals involving consolidation as well as advanced technology led transformation, we are confident about the vision we set for ourselves and our medium-term outlook of $2 billion revenue with EBIT margin of 17-18 per cent,” added Chadha.
To be clear, L&T Tech Services is aiming for revenues to grow between 8-10 per cent in FY25 and maintaining its guidance on hitting the $2 billion yearly revenue mark in the medium-term mark. Chadha reiterated the guidance of bringing the number to 16 per cent by the end of the fiscal, stating that the margins will grow as the company has completed its investments.
The CEO added that L&T Tech Services may announce a couple more deals $50 million soon. “To grow the business going forward, the company wants to focus on the Middle East and European regions,” said Chadha.
On the human resources front, L&T Tech Services has started giving out its yearly hikes from October onwards. In Q2, its overall employee base increased by 121 people to 23,698 staffers, and the voluntary attrition declined to 14.3 per cent from 14.8 per cent in the preceding April-June quarter. The CEO said L&T Tech Services will be hiring 2,000 freshers in FY25 and offers are already being made on the same and expects the attrition levels to be stable or improve further from the current levels.
Ahead of the announcement of Q2 results, shares of L&T Technology Services settled 0.61 per cent higher at ₹5,351 apiece on the BSE as against a 0.39 per cent correction on the 30-share benchmark.
