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L&T Technology Services Q3 FY25 Consolidated Results Analysis 📊
Financial Performance Overview:
Revenue: ₹26,530 million, a growth of 3.1% QoQ and 9.5% YoY 📈.
Net Profit: ₹3,224 million, up by 0.9% QoQ but down by 4.1% YoY 📉.
EBIT Margin: 16.2% (excluding one-time M&A expenses), an improvement of 110 basis points QoQ 💹.
Trail EPS (Trail Earnings Per Share): Trail EPS stands at ₹122.57, reflecting slight fluctuation from previous quarters 123.9💰.
Revenue Breakdown:
Segmental Revenue:
Mobility: 32.4% (↓ from 35.5% Q2 FY25) 🚗.
Sustainability: 31.2% (steady increase) ♻️.
Tech: 36.4% (↑ from 33.7% Q2 FY25) 💻.
Geographic Distribution:
North America: 51.5% (decreased slightly) 🌎.
Europe: 18.2% (stable) 🌍.
India: 22.7% (significant growth) 🇮🇳.
Rest of the World: 7.6% (slight increase) 🌏.
Growth and Strategy Insights:
Constant Currency Growth: Reported at 3.1% QoQ and 8.7% YoY 🌐 which is a good improvement from 6.5% in Q2.
Large Deal Bookings: The quarter witnessed 8 large deals including one worth $50 million, aiding the constant currency growth 📝.
Strategic Initiatives: Completed the acquisition of Intelliswift, creating a new sub-segment in Software & Platforms, enhancing capabilities in AI, digital, and software product engineering 🛠️.
Profitability and Valuations:
Profit Growth: While modest QoQ, there's a decline YoY 🔍.
Profit Margins: Margins showed improvement due to operational efficiencies but are challenged by the slight decrease in YoY net profit 📊.
Valuation Ratio: At a current market price (CMP) of ₹4851, the Trail PE is 40 & FEPS of 136 takes F-PE to 36🔎.
Market and Future Outlook:
Near-Term Outlook: Stabilizing, with a guidance of near 10% revenue growth in constant currency, factoring in contributions from strategic acquisitions like Intelliswift 🔮.
Long-Term Outlook: Aiming for a revenue milestone of USD 2 billion with EBIT margins of 17-18%, indicating strong growth aspirations and operational scaling 🎯.
Innovation and Patents: Continued focus on AI-driven innovations with a significant patent portfolio to back up the tech advancements 🚀.
Investor Considerations:
Strengths: Strong order book, geographic and segment diversification, strategic acquisitions 💪.
Risks: Global economic fluctuations impacting client budgets, currency volatility, and integration risks from recent acquisitions ⚠️.
Conclusion for Long-Term Investors: L&T Technology Services is positioning strongly in technology and sustainability markets with significant investments in AI and digital transformations. Long-term investors should consider the company’s strategic direction, consistent deal wins, and innovation focus as positive indicators, balanced with cautious appraisal of global market conditions and internal integration success following recent acquisitions 🌟.
Disclosure: Do not treat this document as Tips or recommendation, this was created for educational purposes.
