L&T Technology Services (LTTS) signed deals worth $95 million with a US-based automaker between April and December 2021 in the electric vehicle space, CEO & MD Amit Chadha has said, adding the company’s bet on EV is paying off.
The EV segment, in which L&T Technology Services started investing 18 months ago, is one of the six areas the company is pushing to get to annual revenue of $1.5 billion by FY25.
“Overall, the EV space continues to mature and expand. Our clients are talking to us all the time about software, hardware work, OEMs, and tier-1 companies in EV development,” Chadha told Moneycontrol on January 19, a day after the company reported its December quarter numbers.
With an increase in the demand in the EV segment, the company would ramp up talent at its Poland centre over the next three years, Chadha said.
All charged up
Of the $95 million worth of work that the company got, it signed a $45-million deal in the Q3 FY22 and two $25 million deals each in the first two quarters.
Considering that the orders came from a single customer, the company’s biggest bet—EV—was playing out well, Chadha said.
The company started investing in the EV segment to win over new-age car companies to drive growth. It is also betting on 5G, med-tech, AI & digital products, digital manufacturing, and sustainability for annual revenue of $1.5 billion.
LTTS will work with the US-based automotive company on both software and hardware development of its product line and at the same time, expand its centre in Krakow in Poland for servicing its customers.
“I've been to Poland three times and I'm amazed by the technical skill set available in Krakow. We have already hired the head of Poland and will ramp up to about 150 people immediately. Then get to 300 people in the next two to three years,” he added.
The company reported an 8 percent increase in net profit to Rs 248.8 crore for the quarter ended December 2021 from Rs 230 crore in the previous quarter.
Its rupee revenue was up 5 percent at Rs 1,687.5 crore from Rs 1,607.7 crore quarter-on-quarter, while the dollar revenue stood at $225.1 million, up 3.6 percent from the previous quarter, and 18.4 percent from the year-ago period.
The company retained the revenue guidance of 19-20 percent, missing analyst estimates.
Chadha said the company was looking to improve margins in the media segment, part of telecom and hi-tech. The segment had legacy business and the company had taken a call not to renew them, he said. This would result in the quarter revenue for telecom and hi-tech being muted.
“This was taken into account when we gave the 19-20 percent range and we are standing by that. I do believe for the future of the company, it is important to have the right balance of revenue and profits,” he said.
The company hired close to 3,000 freshers, so far, in the fiscal, and plans to take in similar numbers in the next financial year as well, as demand and attrition rise. The company’s attrition rate for the December quarter was 17.5 percent.
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