L&T Technology Services shares rose sharply by up to 14.7% after the company announced its September quarter earnings. This marked the biggest single-day gain for the stock in over two years. Investors reacted positively to the strong financial results and promising business outlook.
- Net profit increased 66% to ₹548 crore in Q2 FY27.
- Revenue from operations grew 12% year-on-year to ₹3,040 crore.
- EBIT margin improved by 60 basis points to 16.3%.
- Large deal wins exceeded $200 million, with over half related to AI.
- Interim dividend of ₹20 per share announced.
What were the key financial highlights for L&T Technology Services in Q2?
The company reported a net profit of ₹548 crore for the second quarter of the current financial year, which is a 66% increase compared to ₹329 crore in the same quarter last year. Revenue from operations rose 12% year-on-year to ₹3,040 crore, up from ₹2,713 crore. On a sequential basis, revenue increased by 3.4%. In dollar terms, revenue grew 4.8% to $317 million. The company also improved its EBIT margin by 60 basis points to 16.3%, indicating better operational efficiency.
How did L&T Technology Services perform in terms of new business deals?
L&T Technology Services recorded robust deal wins during the quarter, with total contract value (TCV) exceeding $200 million. More than 50% of these deals were related to artificial intelligence (AI). Notable wins included one deal worth $75 million, another over $30 million, one at $25 million, and six deals each exceeding $10 million. These large contracts demonstrate the company's strong position in emerging technology sectors.
What is the company’s outlook for future growth?
Amit Chadha, CEO and Managing Director of L&T Technology Services, expressed optimism about the company’s future. He highlighted that both the order backlog and pipeline have improved year-on-year, with several large deals in progress. The company expects revenue momentum to strengthen in the second half of the financial year while maintaining healthy EBIT margins. The long-term goal is to achieve a compound annual growth rate (CAGR) of 13-15% in revenue and maintain EBIT margins between 16-17% over the next five years.
What other notable information did the company share?
At the end of Q2 FY27, L&T Technology Services’ patent portfolio stood at 1,808 patents. Of these, 1,085 patents were co-authored with clients, while the rest were filed independently by the company. Additionally, the company declared an interim dividend of ₹20 per share, reflecting its strong financial position.
How did analysts respond to the earnings report?
Global investment firm Citi noted that sustaining growth and margin trends were key metrics to watch in Q2. Nomura highlighted that growth was driven by sectors such as data centers, energy transition, robotics, and plant engineering. JPMorgan reported that the Q2 results beat expectations for both revenues and margins for the second consecutive quarter. As a result, JPMorgan increased its revenue and earnings growth estimates for FY27 to FY29 by 1-3%.
How did the stock perform in the market following the announcement?
As of 10:43 am on the day following the earnings announcement, L&T Technology Services shares were trading 12.08% higher at ₹4,048. This performance outpaced the broader NFTY LARGEMIDCAP 250 index, which was down 0.4% at the same time.
