Mid-tier engineering services firm, L&T Technology Services (LTTS) reported a 3 per cent rise in its net profit at Rs 203.9 crore in the first quarter of ongoing financial year (Q1FY20). Net profit of the firm grew at 3.2 per cent in sequentially.
Revenues of the company rose 17 per cent year-on-year (YoY) to Rs 1,347.5 crore during this period, which remained almost flat in sequential terms. In dollar terms, revenues of the firm stood at $194 million, a growth of 15 per cent YoY and 1.4 per cent in sequential terms.
"We had a strong quarter in most of our segments – industrial products, transportation, medical and process industry, with sequential growth accelerating in Q1 on the back of multiple deal wins and good deal conversions," said Keshab Panda, CEO & MD at LTTS. During the first quarter, the company won 7 multi-million dollar deals across all its verticals.
However, tepid revenue growth of 1.4 per cent (in dollar term) on sequential basis was on account of some challenges in telecom & hitech vertical. "Our performance in this vertical was impacted by re-prioritisation of spends along with some client specific issues," said Panda. He, however, said that deal pipeline of the company remained strong.
Meanwhile, the loss of momentum in the telecom and hitech vertical in the first quarter led the company to revise its revenue growth guidance to 12-14 per cent for FY20 as against 14-16 per cent given earlier.
During April-June quarter, digital and new age technologies contributed to 37 per cent of its revenue and grew 44 per cent YoY. "Demand environment remains decent with more opportunities in the new age technology space," said Panda.
In Q1, operating margin of the firm rose 230 basis points at 17.1 per cent, while in sequential term, it rose 70 basis points. The company, which added 773 people to take its headcount to 15,913, said that it would add new hires as per the demand environment.