The shares of the leader in engineering service gained up to 5 percent after the company signed an agreement with Intelliswift to acquire a 100 percent stake in the company.
L&T Technology Services Ltd has a market capitalization of Rs 56,349.46 crore, the shares were trading at Rs 5333.85 per share, increasing around 4.43 percent as compared to the previous closing price of Rs 5,107.35 apiece.
Reason for Rise:-
The shares of the company have seen bullish movement after L&T Technology Services Ltd signed an agreement with Intelliswift to acquire a 100 percent stake in the company. The aggregate consideration for this acquisition is USD 110 Million
Moreover, LTTS’ acquisition will strengthen its AI and software capabilities in Digital Engineering for global clients. Key benefits include enhanced software product development, data, and platform engineering, integration of Intelliswift’s AI-led automation framework, and advanced digital enterprise services using agile engineering and next-gen technologies.
Furthermore, Intelliswift services 4 of the Top 5 Hyperscalers and caters to over 25 Fortune 500 companies including 5 of the top 10 ER&D spenders in Software and Technology. With this acquisition, LTTS will also be able to address adjacent markets of Retail and Fintech, along with the Private Equity channel.
Financial condition:-
Analyzing the company’s financial performance, revenue zoomed by 8 percent from Rs 2,136 crore in Q2FY24 to Rs 2,325 crore in Q2FY25 but during the same time, net profit down by 4 percent from Rs 308 crore to Rs 293 crore.
In Q2 FY25, revenue rose 3.9% sequentially, with notable contributions from Sustainability (+6.5%), Mobility (+5%), and Tech (+1%). The company secured two $20 Mn deals, four $10 Mn deals, and increased its $30 Mn accounts to 7 and $10 Mn accounts to 33.
Margin Guidance and Outlook:-
Management anticipates improved EBIT margins in H2 FY25, despite expected wage hikes in Q3, targeting a 16% EBIT margin for the full year. The strong deal pipeline, focused on $25-$100 Mn deals, supports their FY25 revenue growth guidance of 8-10% in constant currency.
Challenge:-
Q3 is expected to be soft due to seasonality and potential furloughs in the automotive sector. Management highlighted macro uncertainties and election-related delays affecting deal closures. Despite challenges faced by Tier 1 automotive clients, LTTS is focused on supporting them through transitional pressures.
Innovation and Technology:-
In Q2, the company filed 51 new patents, bringing its total to 1,394. Recognized as leaders in various segments by analysts (HFS, Avasant, Zinnov), they launched GenIQ, a software development platform designed to accelerate customer AI and Gen AI adoption.
Company Profile:-
LTTS provides engineering, research, and development (ER&D), and digitization solutions to organizations in the transportation, industrial products, telecommunications and high-tech, medical devices, and plant engineering industries.
Written by:- Abhishek Singh
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