L&T Technology Services Ltd

Engagement details

• Name of awarding entity undisclosed per client agreement.
• Five-year engagement to deploy EI across end-to-end product development and engineering lifecycle.
• Engagement valued at over $75 million.
• Awarding entity is international.
• Execution period spans five years.
• Five-year contract with a leading global technology enterprise.
• No promoter group interest; not a related-party transaction.
• Material impact includes Engineering Center creation and EI capability deployment.

Business Overview

• Core business: ER&D services with an AI-powered Engineering Intelligence platform.
• Pivot to AI-led growth via EI platform and software-driven solutions.
• Six Big Bets guide strategy: Mobility, Plant Buildout, Digital Manufacturing.
• Six Big Bets guide strategy: MedTech, AI Infra, EI Platforms.
• TAM expansion to 25+ countries; 190+ global clients with revenue >$1M.
• Partnerships: Anthropic and NVIDIA to advance EI.
• Munich EI CoE to serve Sustainability and Tech segments.
• Caterpillar Supplier Excellence Award acknowledges LTTS.
• Everest Group recognizes LTTS as a leading ER&D provider.

Operational Highlights

• FY26 large deal wins: $855M, up 40% YoY, including a $100M deal.
• LTTS unveiled an EI CoE in Munich to expand capabilities.
• NVIDIA partnership establishes AI Experience Zone to showcase EI platform.
• Anthropic collaboration to leverage Claude for products and industrial solutions.
• Caterpillar Supplier Excellence Award highlights LTTS performance.
• Everest Group ranks LTTS among top ER&D providers.
• Q1 FY27 annualised revenue: $1.24B.
• LTTS emphasizes leadership in ER&D with 103 R&D Innovation Labs and 21 Global Design Centers.

Financial Performance

• Q1 FY27 annualised revenue stands at $1.24B.
• 2031 aspirations: 13-15% revenue CAGR and 16-17% EBIT margin.
• Two-segment revenue target: $1B per segment by 2031.

Capital Structure & Liquidity

• No material debt or liquidity updates disclosed in this update.

Strategic Priorities & Outlook

• Pivot on AI to transform engineering and manufacturing productivity.
• Roadmap: Engineering Services to Technology Solutions through FY31.
• Three shifts: Product, Factory, Customer to drive differentiated value.
• EI platform delivers decision-ready data with up to 85% extraction accuracy.

Risks & Mitigation

• Near-term risks: deal conversion and margin discipline.
• Mobility segment faces soft Europe conditions as a near-term challenge.

Governance & Leadership

• No governance changes announced in this update.

Meeting Details

• Aug 18–19, 2026; Non-Deal Roadshow (in-person); Singapore.
• Aug 20–21, 2026; Non-Deal Roadshow (in-person); Hong Kong.

Participants

• Company will present; no specific management attendees named.

Purpose

• Purpose: investor interaction with presentation aligned to prior release.

Additional Notes

• Presentation to be made available on company and exchange websites.

ESG Rating Update

• NSE Sustainability Ratings and Analytics Limited revised LTTS's ESG score from 74 to 75.
• Date of rating update: August 11, 2026.
• Rating published on NSE ESG rating site and LTTS website.
• Agency: NSE Sustainability Ratings and Analytics Limited.
• No further rationale provided in the disclosure.

Launch highlights

• LTTS announced the launch of AgenticIQ, an end-to-end Agentic AI platform for engineering, manufacturing and customer experience.
• Autonomous, multi-agent workflows across engineering, product development, manufacturing, industrial operations and customer experience.
• Cloud-agnostic architecture supports deployment across cloud and on-premises with governance and IP protection.
• Target industries include automotive, industrial manufacturing, medical devices, healthcare, semiconductor, plant engineering and high-tech.
• LTTS employs over 23,840 people across 21 design centers as of June 30, 2026.
• Customer base includes 69 Fortune 500 companies and 57 top ER&D firms.

Upcoming Meetings

• Aug 12, 2026: Emkay Confluence 2026, Mumbai; group physical investor meeting.
• Aug 13, 2026: Equirus Annual India Conference, Mumbai; group physical investor meeting.
• Company management to present; materials aligned with published presentation.
• Presentation to be available on company and exchange websites.

ESG Rating Update

• Agency: SES ESG Research Private Limited (Category II ESG Rating Provider).
• LTTS SES ESG Score revised to 75.7 from 74.1, up 1.6 points.
• Rationale reflects LTTS's Environmental, Social and Governance performance.
• Rating published at sesesg.com and LTTS website.

Financial Performance

• Revenue ₹2,940 crores in Q1 FY27; sequential growth 2.9%, YoY 11.5%.
• EBIT margin 15.7%, up 50 bps QoQ and 200 bps YoY.
• Net income ₹352 crores; up 1.5% QoQ, 17.4% YoY; 12% of revenue.
• EPS ₹33.17; annualized ₹132.68; vs FY26 ₹115.89.
• Free cash flow ₹540 crores; 153% of net income.
• DSO 77 days combined; billed DSO 57 days; expect 80-85 days.
• USD revenue $309.9 million; CC sequential 1.5%, YoY 1.9%.
• Tax rate 26%; guidance 26.2%-26.7%.
• Cash and investments ₹3,394 crores; end-Q1 versus ₹3,555 crores in Q4.

Segment Update

• Mobility: 2.3% sequential growth; NA strength; Europe moderated; Japan expanding.
• Sustainability: 11.3% YoY, 4.3% QoQ; Ainfonix launched; Emerson named global SI; strong pipeline.
• Tech: demand softer; expected improvement; large telecom deal in early Q2; Anthropic/Databricks partnerships.
• Margins by segment: Mobility 15.6%, Sustainability 29.1%, Tech 11.5%.
• Offshore mix 53.9%; T&M revenue mix 64.9%.
• Q1 large deals: nearly $100 Mn TCV; some wins moved to Q2 ramp-ups.

AI & Strategy Highlights

• Lakshya 31 and Six Technology Bets driving growth and margin expansion.
• Engineering Intelligence portfolio enabling larger deals and smarter engagements.
• Munich EI Center inaugurated; MIT AI Readiness Index collaboration.
• Ainfonix launched to unlock insights from engineering data.
• Claude partnership with Anthropic to integrate Claude models across LTTS platforms.
• AI patents now 244; total patents 1,757.
• EI live event gathered ~40 industry analysts.

Outlook and Guidance

• Long-term target: 13-15% CAGR in revenue over five years; EBIT 16-17%.
• Mid-term: aim for mid-16% EBIT margin by or before Q4 FY27.
• Sequential EBIT margin improvement expected from higher-margin segments, EI-led productivity, and SG&A discipline.
• Continued investments in EI and Lakshya 31 bets to sustain differentiation.

Q&A Highlights

• Q1 large deals near $100 Mn TCV; ramp-ups to begin in early Q2.
• Free cash flow target: 90%+ of net income; Q1 was 153%; year guidance 90-95%.
• Smart World portfolio rationalization expected to conclude in Q2.
• Europe auto demand sub-dued; US auto improving; ROW stable.
• AI is net positive; fixed-price/outcome-based deals rising; productivity benefits passed to clients.
• Discussion on IP ownership and pricing benefits from EI; no definitive commitment stated.
• Right-shifting deals is not broad-based; ramp-ups aligned with closed wins.