LTTS Q2 FY27 Results: Margin Rises to 16.3% Ahead

Earnings Call Transcript Released

L&T Technology Services Ltd, or LTTS, released the transcript of its Q2 FY27 earnings call held on October 19, 2026. The company reported growth in revenue, an improvement in operating margin and a sharp sequential rise in net income. The quarter also included large deal wins with total contract value of $203 million. Management said its mid-16% EBIT margin aspiration had been achieved ahead of schedule. The transcript was attached to the company’s October 25 announcement under Regulation 30 of the Listing Obligations and Disclosure Requirements regulations.

Revenue Rises 3.4% Sequentially

LTTS reported consolidated revenue of INR 3,040 crore for the second quarter of FY27. Revenue increased 3.4% from the preceding quarter and 12.1% from a year earlier. In constant currency terms, sequential revenue growth was 2.7%, according to the company’s finance chief. The reported quarterly revenue figure formed the base for the company’s higher operating profit and net income. LTTS also disclosed quarterly revenue of $317.1 million, but the INR figure is the company’s reported domestic-currency measure.

EBIT Margin Expands to 16.3%

EBIT rose 7.5% sequentially to INR 495.9 crore. The EBIT margin expanded to 16.3% from 15.7% in the previous quarter, a gain of 60 basis points. On a year-on-year basis, the margin improved by 220 basis points. Chief Financial Officer Rajeev Krishnan said the company achieved its committed mid-16% margin aspiration a couple of quarters ahead of schedule. He attributed the performance to disciplined capital allocation aimed at scalable business and profitable growth.

Net Income Includes One-Time Gain

Net income for Q2 FY27 stood at INR 548 crore, up 53.7% sequentially and 66.8% year-on-year. Net income represented 18% of quarterly revenue. The profit figure included a one-time gain of INR 165 crore following the divestment of the Smart World and Communication, or SWC, business. This transaction means the reported profit growth should be viewed alongside the exceptional gain. LTTS said it had successfully concluded the SWC business disinvestment during the quarter.

Key Q2 FY27 Financial Metrics

Sustainability Segment Adds to Growth

The sustainability segment grew 13.4% year-on-year and accounted for 38% of LTTS revenue, according to management. Krishnan described it as the company’s most profitable segment. The contribution highlights the importance of the segment in the company’s quarterly revenue mix. LTTS did not provide a separate absolute revenue number for sustainability in the supplied call highlights. Management also said margin expansion occurred across all segments during the quarter.

Annualised EPS and Tax Outlook

LTTS reported annualised Q2 FY27 earnings per share of INR 143.12. This was 23.5% higher than FY26 EPS, according to the earnings call. EPS from continuing operations was INR 35.78 for the quarter, compared with an INR 35.21 forecast cited in the supplied transcript material. The effective tax rate for the quarter was 26%. Management expects the effective tax rate to remain in the 26% to 26.5% range going forward.

Large Deals and AI Strategy

The company reported $203 million in large deal wins during Q2 FY27. Chief Executive Officer and Managing Director Amit Chaddha said LTTS is expanding its addressable market through domain expertise, proprietary AI toolkits and partnerships with academia and industry. He said the company’s AI approach covers AI for engineering, AI for products, and AI for manufacturing and operations. These remarks set out the areas in which LTTS is seeking revenue opportunities. The supplied transcript does not specify the customers or individual contracts behind the quarterly large-deal tally.

Management Sees Stronger Second Half

Chaddha said LTTS expected the second half of FY27 to be stronger than the first half. The comment followed a quarter marked by sequential revenue growth, margin expansion and the completion of the SWC divestment. The company’s operating-margin target has already been reached, based on management’s comments. However, the reported net income includes the INR 165 crore one-time divestment gain, which is relevant when comparing future quarterly profits. Investors will watch future disclosures for revenue growth, deal conversion, segment performance and margin sustainability.

What the Q2 Update Means

LTTS entered the second half of FY27 after reporting INR 3,040 crore in quarterly revenue and a 16.3% EBIT margin. The results show higher revenue and operating profitability, while the net-profit increase also reflects the completed SWC divestment. Large deal wins of $203 million and growth in the sustainability segment were additional operating highlights. The next company updates will provide evidence on management’s expectation of a stronger second half and the continuing effect of its margin discipline.