LTTS forays into Meta world, to carve out business unit for Metaverse

Amit Chadha, who completes a year at the helm of the company, last year had called out six big bets and changed the narrative of the company's focus

L&T Technology Services (LTTS), the pure play engineering services unit of the L&T Group is betting big on Meta. The company is setting up a Centre of Excellence for Metaverse as well as creating a business unit for Meta. The CoE will be launched by July-August.
 

Amit Chadha, CEO & MD, LTTS shared that while the Coronavirus (Covid-19) pandemic accelerated digital transformation of the business across the globe, the confluence of 5G, digital products, AI and digital manufacturing is finally merging the physical and digital to create a plausible phygital universe.

Chadha, who completes a year at the helm of the company, last year had called out six big bets and changed the narrative of the company’s focus as the eco-system has started to evolve around the digital discourse. The six big tech bets comprised electric autonomous connected vehicles (EAVC), 5G, medtech, AI & digital products and digital manufacturing.

In terms of narrative, Chadha believes just focusing on the revenue and profits is not all that matters and hence LTTS’ narrative will be around industry leading growth, sustainable bottom line, ever increasing tech quotient, improving employee engagement, ESG and investor engagement/customer delight.

Of these six bets, Chadha elaborated that the EAVC has taken off, the medtech bet is on a strong start with solutions that have been developed, on sustainability he said it will take time, but the biggest he has seen is the other three segment—5G, digital products & AI, digital manufacturing. “The confluence of these three, is actually coming out well for Meta or Metaverse. We are launching a vertical within the company called Meta. Within that we are bringing our expertise from our consumer electronics team, product and software team and what we do in the 5G space and put it out as virtual augmented offering from us,” Chadha told Business Standard.

When asked how significant will this be in terms of revenue and if it can become a substantial segment of the revenue, Chadha refrained from giving any number. However, he did say that the six bets that the company announced last year, which is not even 50 per cent of the company now, has the potential to be 80 per cent of revenues in the next five years, “…of this five years we have already completed one year,” he added.

What gives him this confidence around Meta and the offerings is the tech play that the company is already invested in. “We are not an IT services company, but an engineering firm. When it comes to infrastructure pieces, which is the base, we have acquired a few companies in the 5G space, we have also developed our own development centers and labs in Mysore, and Bangalore. We are setting up a center in Dallas in the 5G space. So I believe that Meta’s underlying infrastructure could be 5G, Wi-Fi6 or 6G, that could include chips, software and hardware,” said Chadha.

He also elaborated that some of the work that LTTS is doing for its clients can be leveraged under its Meta ecosystem. Such as virtualisation engine. “We are already seeing a lot of this happening in the automotive space. We have an app, and if you open it and show a particular object, it will show virtually as to what all stuff is in there and what they do. Things like gesture recognition, interface and access using AR/VR are being used by our industrial sector customers as well as people from the healthcare sector are demanding such features,” added Chadha.

For instance, LTTS has developed their own robo-systems with AR capabilities that can be used in assistive surgery. Telemedicine is another area that has seen an increased use of AR/VR and the metaverse reality as well. “These are used cases that we are working with some of the clients. Rather software-as-a-medical-device is gaining acceptance world over,” he added.

Chadha also said that the company is betting on these areas with financial commitments too. “We normally invest between 2-3.5 per cent of our revenue every year on labs, PoC, new solutions etc. We are channeling all our investments on these six bets that I have spoken about. With Meta also becoming a part of our bet even that will get part of investments,” explained Chadha.

LTTS reported revenues of $737 million for FY21. In rupees the company reported a revenue of Rs 5,449.7 crore and net income of Rs 663 crore for FY21. LTTS counts 53 out of the top 100 R&D spenders as its customers, with 90 per cent of its business coming from repeat customers.

When asked how the Covid-19 pandemic has impacted the engineering, research and development segment, Chadha stated that global ER&D spends in FY21 was around $1.5 trillion. Of that $1.5 trillion, global services providers, from India, constituted $16 billon worth of business. “The expectation is that by FY26, that $1.5 trillion will go to about $2.3 to $2.5 trillion. And service providers like us will make up to $34 billion of that spend. What is happening is that companies are moving the same mechanical part much more intelligently through different hardware and software,” he added.