L&T Tech Services profit declines by 8.5% sequentially to Rs 311.1 crore in Q1FY24

LTTS

Engineering R&D (ERD) player L&T Technology Services has recorded 8.5 percent sequential decline in consolidated profit during the quarter ended June 30. The company's Q1 profit stood at Rs 311.1 crore. On a year-on-year basis, profit went up by 13 percent. 

Its revenue from operations in Q1 came in at Rs 2,301 crore, which is including its acquisition of SWC. After factoring in the acquisition of SWC (completed on April 1), LTTS' revenues were down 2.9 percent QoQ and up 14.7 percent YoY.

In dollar terms, revenue came in at $280mn, down from last quarter's $288.4 mn.

Organically, revenue for the quarter came in at Rs 2109 crore, up 0.6 percent sequentially.

Its EBIT margin came in at 17.2 percent, a fall of 70 bps sequentially.

Among verticals, as it was expected, growth was led by Transportation while the softness in hi-tech was a pain point. Transportation grew 3.9 percent, Industrial Products was muted at 0.4 percent and Medical Devices at 0.8 percent. Telecom and hi-tech was down 12.6 percent, and Plant Engineering was down by 4.5 percent.

In a statement, Chief Executive Officer Amit Chadha said demand remains strong in transportation, but growth in other verticals was softer on account of decision-making delays, which impacted deal closures.

"The pace of deal closures picked up towards the end of Q1 and we were able to close a $50 million plus deal and 5 additional deals of $10 million plus each across segments," he said. '

Chadha added that with the acquisition of SWC,  the company is better positioned to play in the Next generation communications space.

"The early wins and critical partnerships with telecom service providers, equipment manufacturers and cyber security providers will create a robust foundation for our future growth," he said.

Soon after the results were announced, LTTS said it has won a deal in hi-tech of $50 million with a five-year tenure for a global tech company.

In terms of geographies, growth was driven by North America (up 3.2 percent QoQ) and Europe (up 2.8 percent QoQ) while India fell sharply (down 19.7 percent QoQ) and Rest of World declined (1.5 percent QoQ).

The company added 318 people on a net basis during the quarter to its headcount, and has seen its attrition fall from 22.2 percent to 18.9 percent sequentially.