Larsen & Toubro Tech Services Q2 net profit up 39.1% to Rs 230 cr

Larsen & Toubro Technology Services (LTTS) on Tuesday posted a 39.1 per cent rise in consolidated net profit to Rs 230 crore for the September 2021 quarter and has raised its dollar revenue growth guidance to 19-20 per cent.

The company had registered a net profit of Rs 165.5 crore in the year-ago period, it said in a regulatory filing.

Its revenue grew 22.4 per cent to Rs 1,607.7 crore in the quarter under review from Rs 1,313.8 crore a year ago, it added.

The company has announced a special dividend of Rs 10 per share to mark the five-year anniversary of LTTS' IPO and the record date has been set as October 27, 2021.

LTTS, which has seen attrition spike to 16.5 per cent in the second quarter of the financial year 2021-22, plan to hire 2,000 freshers in the next six months.

On a sequential basis, the net profit was higher by 6.4 per cent from Rs 216.2 crore, while revenue increased 5.9 per cent from Rs 1,518.4 crore in the June 2021 quarter.

During the quarter, LTTS won 5 deals with TCV of USD 10 million-plus, which includes two USD 25 million-plus deals.

We had a strong quarter with 6 per cent sequential growth in constant currency driven by healthy traction in digital engineering across all our five segments. The rising digital adoption across our customer base has led to our revenue from digital and leading-edge technologies increasing to 55 per cent in Q2," LTTS Chief Executive Officer and Managing Director Amit Chadha said.

He added that medical - the youngest segment for the company - crossed USD 100 million in annualised revenue and "is a testament to our differentiated domain expertise and strategic relationships".

"We are seeing a healthy deal pipeline and good traction in our six big bets - Electric Autonomous & Connected Vehicle (EACV), 5G, Med-tech, AI & Digital Products, Digital Manufacturing and Sustainability. Our broad-based growth was accompanied by a rise in Operating margin which at 18.4 per cent is the highest we have reported," he said.

Chadha stated that the company will continue the journey of investing in innovation labs and capability building, which has yielded gains in market share and operating model efficiency.

The company is upgrading its financial year 2021-22 dollar revenue growth guidance to 19-20 per cent on the back of strong deal pipeline and demand, he added.

The company's revenue in US dollar terms was at USD 217.4 million in the September 2021 quarter - up 5.7 per cent sequentially and 22.1 per cent on a year-on-year basis. In constant currency terms, revenue was up 6 per cent quarter-on-quarter and 22.3 per cent year-over-year.

Its headcount stood at 17,983 people at the end of the September 2021 quarter. Its attrition was 16.5 per cent.

"We are working on attrition right now, we need to do more in this area. We have hired about 800 freshers in the last quarter alone and we plan to hire 2,000 freshers in the next six months, largely Q3 and we are hopeful that with the things we are doing within the organisation, we will be able to make an impact," Chadha told PTI.

At the end of the second quarter, the patents portfolio of LTTS stood at 769, out of which 556 are co-authored with its customers and the remaining 213 are filed by the company.