L&T Technology Services Navigates Q2 FY26 with Record Deal Wins and AI-First Strategy

L&T Technology Services (LTTS), a global leader in engineering and technology services, announced its Q2 FY26 results, showcasing a robust performance marked by record deal wins and strategic advancements in AI. The company reported a consolidated revenue of ₹2,979.5 crore, reflecting a strong 15.8% year-on-year growth and a 4.0% sequential increase. Net profit stood at ₹328.7 crore, up 4.1% quarter-on-quarter and 2.8% year-on-year, with an EBIT margin of 13.4%. These figures underscore LTTS's ability to maintain momentum amidst evolving market dynamics, driven by its 'Go Deeper to Scale' and multi-segment strategy.

The quarter's standout achievement was the record high Total Contract Value (TCV) of nearly USD 300 million in large deal wins, including a significant USD 100 million deal in the Sustainability segment and a USD 60 million deal in the Tech segment. This reflects strong client confidence in LTTS's next-gen offerings. Segment-wise, Sustainability emerged as a key growth driver, achieving double-digit annual growth for two consecutive quarters and securing its largest-ever deal. The Tech segment also demonstrated resilience, contributing significantly to the overall performance. However, the Mobility segment experienced a subdued quarter, primarily due to program pauses and muted decision-making in the Automotive sub-segment, along with anticipated cyclical impacts and furloughs in the coming quarter. Despite this, management expressed optimism for a rebound in Q4 FY26.

Strategic Thrust: AI-First and Innovation

LTTS is making significant strides in its AI-first delivery model, investing heavily in GenAI, Agentic AI, and Physical AI. The company has filed 216 patents in AI and GenAI alone, pushing its overall patent count past the 1,600 mark. The launch of proprietary platforms and solutions like Qguard.ai, FusionWorld.ai, PLxAI, AiNexus, GENIQ, and TrackEi™™ demonstrates LTTS's commitment to driving automation, contextual intelligence, and real-life machine applications. These platforms are already seeing healthy client engagement and early monetization, with license revenue from these products contributing 1% to the trailing 12-month revenue, with a goal to expand this to 5% in the medium term.

Strategic partnerships further bolster LTTS's innovation agenda. A multi-year membership agreement with the MIT Media Lab aims to foster AI-led innovations across Mobility, Sustainability, and Tech segments. Collaborations with semiconductor innovators like SiMa.ai and NVIDIA, alongside research institutions, ensure a future-ready and scalable technology backbone. The company also expanded its operational footprint with multiple Offshore Development Center (ODC) inaugurations in Vadodara, Mysore, and Pune, catering to diverse industries.

Outlook and Management Confidence

Looking ahead, LTTS management expressed confidence in continued growth and margin improvement. They anticipate H2 FY26 to outperform H1, with an aspiration for double-digit growth for the full fiscal year. The medium-term outlook for USD 2 billion in revenue remains firm. The company expects EBIT margins to improve sequentially, targeting mid-16% levels between Q4 FY27 and Q1 FY28, driven by growth, improved revenue quality, operational efficiencies, and the successful integration of Intelliswift. The effective tax rate is also expected to stabilize between 26.5% and 27.0%.

LTTS's Q2 FY26 performance reflects a company strategically pivoting towards AI-led engineering services, securing large deals, and strengthening its operational and leadership capabilities. Despite some segmental challenges, the overall narrative is one of resilient growth and a clear vision for sustainable value creation, reinforcing investor trust in its long-term trajectory.