L&T Technology Services spurts on strong Q2 earnings

L&T Technology Services surged 9.02% to Rs 3,937.20 after reporting a strong performance in Q2 FY27.

On a consolidated basis, revenue rose 12.1% year-on-year (YoY) and 3.4% quarter-on-quarter (QoQ) to Rs 3,040.4 crore. Net income increased 66.8% YoY and 53.7% QoQ to Rs 548.2 crore. However, the figure included a one-time capital gain of Rs 165 crore from the disinvestment of the Smart World & Communication (SWC) business.

Net income from continuing operations rose 19.7% YoY and 7.9% QoQ to Rs 379.6 crore during the quarter.

Revenue in US dollar terms stood at $317 million, up 2.7% QoQ, while constant-currency revenue increased 4.8% YoY.

Gross profit increased 21.7% YoY and 5.6% QoQ to Rs 985.1 crore. Gross margin improved to 32.4% from 29.8% in Q2 FY26 and 31.7% in Q1 FY27.

EBITDA rose 23.5% YoY and 6.8% QoQ to Rs 585.8 crore. EBITDA margin expanded to 19.3% from 17.5% a year earlier and 18.7% in the previous quarter.

Earnings before interest and tax (EBIT) increased 29.8% YoY and 7.6% QoQ to Rs 496.6 crore. EBIT margin improved to 16.3% from 14.1% in Q2 FY26 and 15.7% in Q1 FY27.

Cost of sales rose 7.7% YoY and 2.4% QoQ to Rs 2,055.3 crore. Selling, general and administrative expenses increased 19.2% YoY and 3.8% QoQ to Rs 399.3 crore.

L&T Technology Services secured large deals with total contract value exceeding $200 million during the quarter, with AI-related deals accounting for more than 50% of the total. Wins included one deal worth $75 million, one exceeding $30 million, one worth $25 million and six deals worth more than $10 million each.

The company declared an interim dividend of Rs 20 per share, with 27 October 2026 as the record date. Its patent portfolio stood at 1,808 at the end of Q2 FY27, including 1,085 co-authored with clients. Employee strength stood at 24,035.

Amit Chadha, CEO and managing director of L&T Technology Services, said investments in Engineering Intelligence and a diversified portfolio supported sequential growth in revenue, profitability, large deals and AI revenue. He said the Sustainability business delivered its strongest growth during the quarter, Mobility sustained its growth momentum, and Technology remained steady, with gross margins improving across all segments.

The company launched an Engineering Intelligence Lab in partnership with NVIDIA to develop Physical AI-native applications for manufacturing, robotics and supply chains. Its EIOne platform offers more than 100 solutions across engineering, products, manufacturing and operations. AI patent filings have exceeded 250.

Chadha said the company's order backlog and pipeline had improved YoY and that it expected revenue momentum to strengthen in the second half of FY27 while maintaining healthy EBIT margins. LTTS retained its long-term aspiration of achieving 13-15% revenue CAGR and EBIT margins of 16-17% over the next five years.

L&T Technology Services (LTTS), a subsidiary of Larsen & Toubro, provides engineering research and development (ER&D) and Engineering Intelligence solutions across Mobility, Sustainability and Technology. As of 30 September 2026, it employed 24,035 people across 21 global design centres, 31 sales offices and 111 innovation labs. Its customer base includes 69 Fortune 500 companies and 57 leading ER&D companies across industrial products, medical devices, transportation, telecom, high-tech and process industries.

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