L&T Technology Services Targets $2 Billion Revenue In ‘Medium Term’

With global engineering research & development (ER&D) spending projected to grow at 4 - 5% in CY2025, and 8–9% CAGR through 2031, L&T Technology Services (LTTS) is well placed to benefit from this wave.

L&T’s technology arm is targeting $2 billion in total revenue in the medium term, by scaling across three “billion-dollar segments” - mobility, sustainability, and technology. These are underpinned by four-year CAGRs between 14% and 22%, driven by electrification, software-defined mobility, innovation in energy transition, digital manufacturing, and healthcare platforms.

In an investor presentation dated August 10, LTTS said its ambition is backed by the performance across the last three straight quarters, during which the firm had secured $200+ million in total contract value (TCV) from large deals, including a large $80 million deal with a US-based manufacturer of industrial products and solutions.

Analyst Take

LTTS’s $2 billion topline expectations in the medium term are supported by the expanding global ER&D market, expected to touch $3.8–4.3 trillion by 2031, said SEBI-registered analyst Saurabh Sahu.

As of Q4FY25, LTTS posted $1.4 billion annualized revenue, serving 57 of the top 100 global R&D spenders with over 90% repeat business. Over the last four years, revenue has grown at a 14% CAGR, while PAT rose at an 18% CAGR, and FY25 saw record free cash flow at 109% of net income, Sahu noted.

The company is also strongly focusing on the AI/GenAI segment, where it holds 206 patents, the analyst said. LTTS plans to lift EBIT margins to 16.5% by FY27/28 through offshore delivery expansion and operational efficiencies.

Q1 Earnings Snapshot

L&T Technology Services posted a modest 0.7% growth in Q1FY26 net profit to ₹316 crore, while revenue from operations grew 16% to ₹2,866 crore.

Domestic brokerage firm Motilal Oswal reiterated its ‘neutral’ rating for the stock, while slashing its target price to ₹4,300.

Stock Watch

LTTS shares were trading marginally higher at ₹4,178.6. Year-to-date, the stock has shed 11.7%.

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