L&T Technology Services (LTTS) posted an 11.5 per cent year-on-year increase in revenue to Rs 2,940 crore and a 13 per cent rise in net profit to Rs 357 crore. The engineering services company delivered broad-based growth led by its Sustainability segment, which grew nearly 24 per cent YoY to become its largest business, while Mobility continued to expand steadily and the Tech segment remained largely flat. Despite higher employee costs, which rose about 9 per cent YoY, LTTS improved profitability as operational efficiencies and the absence of one-time restructuring charges supported margins. As artificial intelligence (AI) increasingly becomes central to engineering services, the company says AI is now embedded in virtually every client engagement and remains a key driver of its growth strategy.
The company’s leadership attributes the performance to a diversified portfolio that allows learnings from one business area to be applied to another. In an interview with BW Businessworld, Executive Director Alind Saxena said the firm focuses on mobility, sustainability, and tech internally, and that AI’s integration into software and physical systems is creating a fundamental shift. The Mobility segment grew by 2.3 per cent, with Saxena noting healthy growth in aero and rail, though trucks and off-highway saw a soft patch due to agricultural market volatility that has since turned around.
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LTTS is seeing a distinct shift in how it engages with clients, particularly in its Sustainability segment. Saxena explained that the company works on two critical layers of the data centre AI stack: infrastructure and energy, specifically power electronics and cooling systems. The firm is also modernizing existing refineries to accommodate new products amid global market volatility. While the Tech segment faced a temporary dip due to a specific client ramp-down issue, officials indicated a recovery is imminent, with new deals expected to be announced shortly.
The integration of AI into client conversations has fundamentally altered the deal structure. Saxena noted that there is no deal the company can win today that does not contain an AI component. Additionally, these engagements are increasingly fixed-price and outcome-based rather than time-and-material arrangements, which gives the service provider more freedom in managing projects and staffing. This shift toward outcome-based models, combined with a re-education of the workforce to handle new technologies, has helped manage rising employee costs.
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LTTS has set a target to reach around 16 per cent margins by the fourth quarter of fiscal 2027. Officials say they are on track to meet this goal through increased utilisation, a strategic shift toward fixed-price contracts, and the continued development of employee skills. The company has established its own academy to retrain staff across different segments, ensuring the workforce is ready to pick up incoming programs. Saxena concluded that while the company remains bullish on its prospects, it must remain vigilant to maintain this momentum.
This growth trajectory highlights the competitive advantage of a diversified portfolio.