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L&T Tech reports 4.5% sequential growth in CC revenue in Q2, raises FY23 revenue forecast to 15.5-16.5%

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  • The company said it has achieved annual sales of $1 billion.
  • It signed a multi-million dollar deal from BMW to provide high-quality engineering services for its hybrid cars.
  • L&T Tech announced an interim dividend of ₹15 per share, with a record 28 October.

IT services company L&T Tech today posted 2.9% growth in net profit for the second quarter to 282 crore from ₹274 crore last quarter. Sales grew 4.5% sequentially at constant exchange rates to 1,995 crore from 1,874 crore in the first quarter.

On an annual basis, net profit grew by 22.6% and turnover by 24%.

“We are proud to have achieved $1 billion in annualized revenue in the second quarter at constant exchange rates. Our momentum remained strong in the second quarter of the fiscal year, with revenue growing 4.5 percent in constant currency,” said Amit Chadha, CEO and MD of L&T Tech.

The company raised its FY23 revenue forecast from 13.5-15.5% to 15.5-16.5%, saying that despite the macroeconomic uncertainties, the company sees customer investment continue in its six major betting areas.

Despite the recession in Europe, Chadha said: “Deal bookings have been healthy, especially in Europe, where we have a record high total contract value and look forward to doubling our bookings this fiscal year.”

L&T Tech said it won a multi-million dollar deal from BMW Group to provide high-quality technical services for infotainment consoles in its hybrid cars.

However, net margins continued to be under pressure and declined both sequentially and year on year. In addition, turnover deteriorated consecutively during the quarter by 280 basis points to 23.2%. The net number of employees was 572.

Here’s L&T Tech’s Q2 in numbers:

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Revenue ₹1995 crore ₹1,874 crores ₹1,608 crores
Net profit ₹282 crore ₹274 crore ₹230 crore
Net margin 14.1% 14.6% 14.3%

Source: Company Reports

The company announced an interim dividend of ₹15 per share, with a record date of 28 October.

By segment, transportation continued to grow more strongly – contributing to more than a third of the company’s revenue. It also emerged as the best performing both QoQ and YoY.

Vertical Q2 FY23 QoQ change YoY change
transport 34.5% 7.4% 25.2%
Industrial products 18.9% 2.5% 7.2%
Telecom and Hi-tech 19.4% -1.3% 4.4%
Plant Engg 16.3% 4.6% 20.8%
Medical equipment 10.9% -2.3% 1.6%

Source: Company Reports

Geographically, the US and Europe continue to dominate with nearly 80% share of the company’s revenue. India’s share fell slightly in the quarter.

Geography Q2 FY23 QoQ change YoY change
North America 63.4% 4.0% 14.5%
Europe 15.9% -0.1% 8.3%
India 12.8% -0.3% 12.3%
Rest of the world 7.9% 9.5% 20.9%

Source: Company Reports

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