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L&T Technology Services Ltd. reported strong financial performance for the quarter. While, the revenue growth was inline with estimates, Ebit margin came above expectation.
It reported constant currency growth of 4.5% QoQ, led by transportation vertical (up 7.4% QoQ) and plant engineering (up 4.6% QoQ).
The Indian rupee reported growth of 6.5% QoQ was supported by depreciation of Rs by 3.4% QoQ versus U.S. dollar.
There was sequential decline in Ebit margin (down 14 bps QoQ) led by impact of wage hike in the quarter (slightly offset by control on other expenses).
There was slight increase in reported employee attrition as last twelve months attrition increased by 90 basis points QoQ to 24.1%.
L&T Tech’s long term demand environment remains intact led by growing outsourcing of engineering research and development services. However, the clients especially in sectors such as hitech and medical devices have become cautious regarding the evolving macroeconomic situation leading to signs of demand softness in these segments and it poses near term risks.
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