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L&T Technology Services Ltd.’s Q2 FY23 revenue growth at 4.5% QoQ constant currency beat our estimate of 4%. The growth was led by transportation (9.4% QoQ CC) and plant engineering (6% QoQ CC) verticals.
However, the company continued to witness tightening of budgets in the medical devices segment and pauses in the sub-verticals of hi-tech and telecom.
Management has narrowed its revenue growth guidance band to 15.5-16.5% YoY CC for FY23 (versus 14.5-16.5% earlier).
The guidance implies soft revenue growth of 0.6-1.8% QoQ CC in the next two quarters (Q3, Q4) and factors-in the potential impact of macro headwinds apart from furloughs in Q3 FY23 in our view.
We model 13% YoY U.S. dollar growth for FY23E.
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