L&T Technology Services expects a stronger second half of the financial year as large deals begin contributing more revenue and demand for artificial intelligence-related engineering work accelerates.
The engineering and research services company reported second-quarter revenue of ₹3,040.4 crore, up 12.1% from a year earlier and 3.4% from the previous quarter.
In dollar terms, revenue reached $317 million.
The company said large-deal wins crossed $200 million during the quarter, with AI-related work accounting for more than half of the total.
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Large Deals Begin Converting Into Revenue
LTTS said the September quarter benefited from the execution of large contracts secured over recent quarters.
Chief Executive Amit Chadha said the company entered the second half with a stronger order backlog and expects recently signed contracts to ramp up further.
The company won one deal worth $75 million, another valued above $30 million, one above $25 million and six contracts worth more than $10 million each during the quarter.
Large engineering contracts often take time to contribute meaningfully to revenue because clients gradually move work onto the service provider’s systems and teams.
That means a deal announced in one quarter may only begin generating substantial revenue several months later.
LTTS believes this ramp-up will become more visible over the next two quarters.
Revenue growth was also supported by higher spending in the company’s sustainability business.
That division includes engineering work connected to energy, industrial systems, infrastructure and other areas where companies are investing in modernisation.
AI Now Forms More Than Half of Large Deal Wins
The most important shift in LTTS’s deal mix is the growing role of artificial intelligence.
The company said AI-related work represented more than 50% of its large-deal wins during the quarter.
That does not necessarily mean half of current revenue comes from AI.
Instead, it shows that AI is becoming increasingly embedded in new engineering contracts being signed with clients.
Unlike traditional IT outsourcing, LTTS focuses heavily on engineering research and development.
Its clients include companies in automotive, industrial manufacturing, telecommunications, healthcare and technology.
AI in those sectors can be used for autonomous systems, product design, predictive maintenance, digital twins and industrial automation.
LTTS calls its strategy “Engineering Intelligence”, combining engineering expertise with AI and digital technologies.
The company says that approach is helping it address a wider range of client requirements rather than competing only for traditional engineering outsourcing work.
Profit Gets Boost From One-Time Gain
LTTS reported net profit of ₹548.2 crore for the quarter, up 66.8% from a year earlier.
However, the sharp increase included a one-time gain of ₹165 crore from the divestment of its Smart World and Communication business.
Excluding exceptional items, the underlying improvement was more modest.
The company’s EBIT margin improved by 60 basis points from the previous quarter to 16.3%.
A basis point is one-hundredth of a percentage point, meaning the margin improved by 0.6 percentage points.
Margins are closely watched in the technology-services industry because companies must balance wage costs, subcontracting expenses and pricing pressure from clients.
AI adds another challenge.
Clients increasingly expect automation to reduce the amount of human effort required for some tasks, which can put pressure on traditional billing models.
At the same time, AI creates new consulting, engineering and implementation opportunities.
LTTS is betting that the second effect will outweigh the first.
Indian Tech Companies Face Uneven AI Transition
The company’s outlook stands out in an Indian technology sector that continues to show mixed signs of recovery.
Some larger IT services companies are still dealing with cautious client spending and pressure on conventional outsourcing contracts.
Others are reporting stronger large-deal pipelines, particularly where AI, cloud and modernisation projects are involved.
LTTS differs from many traditional software exporters because a large share of its business is tied to engineering and product development.
That could make it better positioned to benefit from AI spending in manufacturing, automotive and industrial applications.
But execution remains important.
Winning a large contract does not automatically guarantee faster growth if clients delay projects or reduce spending.
LTTS will therefore need to convert its growing backlog into revenue while maintaining margins.
The company has also declared an interim dividend of ₹20 per share, with October 27 set as the record date.
For now, management believes stronger deal execution, AI demand and sustainability-related spending will support a more robust second half.
What this means for you:
LTTS’s results show that AI spending is spreading beyond software companies into engineering, manufacturing and industrial services. The key indicator to watch now is whether large AI-led contracts convert into sustained revenue growth.
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