LTM expands margins as revenue growth outpaces costs
Operating margin recovered 0.28 percentage points sequentially, but remained 0.93 percentage points below the 18.68% median for 14 reported IT peers.
Filed 11 Jul 2026, 18:59 IST · after market close · LTM Ltd (LTM)
Key takeaways
- Consolidated revenue grew 17.96% YoY as expenses rose 16.56%, lifting operating margin by 0.99 percentage points.
- Net profit rose 17.06% YoY, helped by a 1.55-percentage-point lower tax rate, while other income contributed 12.91% of pre-tax profit.
- The stock gained 2.16% on the first reaction day, reversing its usual pattern of declines after results but moving less than the 3.5% median absolute move.
Price around the results
Revenue growth widened the operating spread
Consolidated revenue increased 17.96% YoY and 2.80% QoQ, while expenses grew more slowly at 16.56% YoY and 2.45% QoQ. That spread lifted operating margin by 0.99 percentage points YoY and 0.28 percentage points sequentially. Management said its AI pivot was producing client proof points and influencing the size and nature of engagements won in Q1FY27.
Margins recovered, but remain below the recent peak
Operating margin improved to 17.75% from 17.47% in Q4FY26, as revenue growth exceeded expense growth. The margin remains below the 18.57% in Q2FY26 and 18.58% in Q3FY26, so the quarter marked a recovery rather than a return to the recent high. LTM's margin was 0.93 percentage points below the 18.68% median among 14 Information Technology peers that had reported.
Profit growth had tax and other-income support
Net profit grew 17.06% YoY, ahead of the 14.61% increase in pre-tax profit, as the tax rate fell 1.55 percentage points to 25.77%. Other income was 12.91% of pre-tax profit, making it a meaningful contributor to reported earnings, although it fell 34.86% YoY. Interest expense rose 16.85% sequentially, which limited the conversion of operating profit into pre-tax profit.
Management points to AI-led pipeline conversion
Management said LTM expects growth momentum to build through the year, citing its order book and industry-segment pipeline. The company said it had joined AWS's Agentic Process Transformation programme and was a Microsoft Agent 365 launch partner, with both initiatives aimed at moving enterprise AI work from proofs of concept towards production. It also highlighted an AI-led infrastructure operations mandate from a US insurance company and a data-transformation engagement with a global industrial manufacturer.
The initial market reaction bucked LTM's history
The shares rose 2.16% on the first reaction day, with volume at 3.63 times the reference level, and were up 1.16% after five sessions. That was unusual in direction: only one of LTM's last eight result reactions was positive, while seven were negative. The initial gain was also smaller than the stock's 3.5% median absolute move after recent results; the company filed these consolidated results after market close.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹11,608 cr | ₹11,292 cr | +2.80% | +17.96% |
| Other income | ₹255 cr | ₹237 cr | +7.81% | -34.86% |
| Expenses | ₹9,547 cr | ₹9,319 cr | +2.45% | +16.56% |
| Operating profit | ₹2,061 cr | ₹1,973 cr | +4.44% | +24.93% |
| Operating margin (%) | 17.75% | 17.47% | — | — |
| Interest | ₹76 cr | ₹65 cr | +16.85% | +5.39% |
| Depreciation | ₹261 cr | ₹264 cr | -0.87% | +7.58% |
| Profit before tax | ₹1,978 cr | ₹1,881 cr | +5.18% | +14.61% |
| Tax | ₹510 cr | ₹494 cr | +3.26% | +8.10% |
| Net profit | ₹1,469 cr | ₹1,387 cr | +5.86% | +17.06% |
| EPS (₹) | ₹49.46 | ₹46.97 | +5.30% | +16.84% |
Operating margin of 17.75% compares with a Information Technology sector median of 18.68% across 14 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.16% | +2.14% |
| Next session | +0.63% | — |
| 5 sessions | +1.16% | +1.03% |
Volume on the results session was 3.63× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- LTM said its AI pivot produced tangible client proof points and influenced the size and nature of engagements won in Q1 FY27.
Guidance & outlook
- LTM expects its growth momentum to continue building through the year, supported by a strong order book and healthy industry-segment pipeline.
New orders
- A US-based insurance company selected LTM to modernize infrastructure operations through an AI-led delivery model.
- A global industrial manufacturer selected LTM as a strategic data transformation partner to consolidate its data ecosystem into an enterprise platform.
New products
- A leading US leisure travel company selected BlueVerse Voicing to automate member verification and resolve routine inquiries autonomously.
New initiatives
- LTM became an early AWS partner in the Agentic Process Transformation programme to build qualified pipeline and scale proofs of concept.
- As a Microsoft Agent 365 launch partner, LTM is accelerating enterprise AI from pilots to production-scale ecosystems.
What to watch
- Whether revenue growth remains ahead of expense growth after the 17.96% versus 16.56% YoY spread.
- Whether operating margin holds above 17.75% and moves closer to the 18.68% peer median.
- Whether other income remains below the 12.91% share of pre-tax profit while AI engagements move beyond proof-of-concept work.