LTTS lifts operating margin to 19.27% as large AI-led deals exceed USD 200m
Revenue growth was modest at +2.04% YoY, but slower expense growth lifted margins for a fifth straight quarter.
Filed 19 Oct 2026, 16:03 IST · after market close · L&T Technology Services Ltd (LTTS)
Key takeaways
- Consolidated revenue grew +2.04% YoY, while operating margin expanded 2.80 percentage points to 19.27%.
- Reported net profit rose +66.68% YoY to Rs 548.7 cr, while other income contributed 6.02% of pre-tax profit.
- Large-deal TCV exceeded USD 200 million, with AI-led deals accounting for more than 50% of the total, management said.
Price around the results
Revenue growth remained modest, but profit accelerated
Consolidated revenue grew +2.04% YoY and +3.41% QoQ, while operating profit increased +19.36% YoY and +6.84% QoQ. Expenses fell -1.37% YoY and rose +2.63% QoQ, slower than revenue in both comparisons. Reported net profit increased +66.68% YoY and +53.65% QoQ.
Lower cost growth supported the margin expansion
Operating margin expanded 2.80 percentage points YoY because revenue grew while expenses declined, and rose another 0.62 percentage points QoQ as revenue growth outpaced expense growth. Interest expense fell -12.03% YoY, while the tax rate was 0.54 percentage points lower; the QoQ tax-rate change was just -0.01 percentage points. Other income fell -52.9% YoY and still represented 6.02% of pre-tax profit, so it was not the main source of the operating-margin improvement.
Margin has risen for five consecutive quarters
Operating margin has increased from 16.13% in Q1FY26 to 19.27% in Q2FY27, with each quarter in the reported trend showing an improvement. LTTS's 19.27% margin matched the median of the 11 Information Technology peers that had reported the same quarter. Management said Sustainability continued to grow, Mobility maintained momentum, while Tech revenue declined 8.5% YoY and Europe revenue declined 3.9% YoY.
Management points to AI-led orders and new engineering capacity
Management said revenue momentum should strengthen in H2 while margins are sustained, citing an improving order backlog and pipeline and several large deals in progress. The company said it won a five-year telecommunications agreement that includes a dedicated Engineering Center, and was selected to establish a global Engineering Centre of Excellence for an energy services provider. LTTS also said it launched an EI Lab with NVIDIA and EIOne, its standardized Engineering Intelligence platform.
Results were filed after market close; past reactions were mixed
The results were filed after market close, so there is no current market reaction to assess. Across the last eight result reactions, the stock rose four times and fell four times, with a median absolute move of 2.83%. The historical record therefore shows no consistent directional response.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,040 cr | ₹2,940 cr | +3.41% | +2.04% |
| Other income | ₹31 cr | ₹29 cr | +6.19% | -52.90% |
| Expenses | ₹2,455 cr | ₹2,392 cr | +2.63% | -1.37% |
| Operating profit | ₹586 cr | ₹548 cr | +6.84% | +19.36% |
| Operating margin (%) | 19.27% | 18.65% | — | — |
| Interest | ₹14 cr | ₹14 cr | -3.47% | -12.03% |
| Depreciation | ₹89 cr | ₹87 cr | +2.64% | -3.56% |
| Profit before tax | ₹514 cr | ₹476 cr | +7.88% | +14.62% |
| Tax | ₹133 cr | ₹124 cr | +7.84% | +12.29% |
| Net profit | ₹549 cr | ₹357 cr | +53.65% | +66.68% |
| EPS (₹) | ₹51.67 | ₹33.62 | +53.69% | +66.57% |
Operating margin of 19.27% compares with a Information Technology sector median of 19.27% across 11 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Sustainability delivered strong growth, Mobility sustained its growth momentum and Tech remained steady during the quarter.
Guidance & outlook
- LTTS expects revenue momentum to strengthen further in H2 while sustaining healthy EBIT margins.
- LTTS said growing demand for Engineering Intelligence solutions and improving regional opportunities support confidence in its medium-term trajectory.
Expansion
- LTTS will establish a dedicated Engineering Center for technology and digital functions under a five-year telecommunications agreement.
- LTTS was selected to establish a global Engineering Centre of Excellence for a leading energy services provider.
New orders
- LTTS recorded large-deal TCV above USD 200 million, with AI-led deals accounting for more than half of the total.
- LTTS won a five-year telecommunications agreement to deploy EI capabilities and establish a dedicated Engineering Center.
New initiatives
- LTTS launched an EI Lab with NVIDIA to build Physical AI-native applications for manufacturing, robotics and supply chain.
- LTTS launched EIOne as the standardized platform for its Engineering Intelligence ecosystem.
- LTTS launched LTTS FARM to accelerate commercialization of deep-tech startups through EI-led collaboration.
- LTTS entered a strategic partnership with Cognite to co-develop and deliver industrial AI and data solutions.
- LTTS conducted its first global EI Hackathon, a 24-hour innovation challenge connecting engineers across multiple cities.
Problems & risks
- Tech segment revenue declined 8.5% year on year in Q2 FY27.
- Europe revenue declined 3.9% year on year in Q2 FY27.
What to watch
- Whether operating margin holds above 19.27% next quarter.
- Whether the 8.5% YoY decline in Tech revenue narrows.
- Whether large-deal TCV remains above USD 200 million and AI-led deals stay above 50% of the total.