LTTS Q1 Profit Up 1%, Margins Decline | Business News

Mumbai, Jul 18 (PTI) L&T Technology Services (LTTS) on Thursday reported a 1 per cent increase in post-tax profit for the June quarter at Rs 314 crore as profitability declined.

The engineering services arm of L&T had reported a net profit of Rs 311 crore in the year-ago period, but the profit after tax (PAT) was 8 per cent down when compared with the preceding March quarter.

Its overall revenues grew 7 per cent to Rs 2,462 crore from Rs 2,301 crore in the year-ago period, but were 3 per cent down when compared with the quarter-ago period's Rs 2,538 crore.

Its Managing Director and Chief Executive Amit Chadha told PTI that the sequential revenue decline has a seasonal element to it because its recently acquired Smart World and Communication's business reports higher growth in the January-March period.

The profit growth was lower in the June quarter when compared to the year-ago period because of the higher investments by the company in leadership talent as a result of the recently announced reorganisation and artificial intelligence-related aspects, he said.

The operating profit margin narrowed to 15.6 per cent during the reporting quarter, down from 17.2 per cent in the year-ago period and 16.9 per cent in the quarter-ago period.

Chadha said the company will continue to make investments, but added that the higher revenues will help it post better financial metrics going ahead.

"Here onwards we do see the upward trajectory on both revenue growth and margin growth," he said.

The company is still retaining its medium-term target of hitting the USD 1.5 billion per year revenue run rate by the end of FY25, Chadha said, adding that it expects margins to grow to 16-17 per cent by the fourth quarter of the current fiscal.

The slowest growth was in the sustainability vertical at 0.5 per cent when compared to the year-ago period, while the hi-tech vertical seems to have led to the decline in sequential numbers with a 11.6 per cent fall.

Among the geographies, North America showed a decline of 1.4 per cent year-on-year, and 4.6 per cent sequentially.

Its overall headcount declined over 250 people to 23,577 employees as on June 30, but Chadha said the overall base will show an increase for FY25 and in the ongoing September quarter alone, it will add over 300 people.

He said the company will be delivering salary hikes to employees by the first week of October.

The company's scrip closed 0.50 per cent down at Rs 4,845.20 apiece on the BSE on Thursday, as against gains of 0.78 per cent on the benchmark.