L&T Tech reports sequential growth of 4.5% in CC revenues in Q2, upgrades FY23 revenue guidance to 15.5-16.5%

• The company said that it has hit $1 billion in annualized revenue run rate.
• It bagged a multi-million dollar deal from BMW to provide high-end engineering services for its hybrid cars.
• L&T Tech declared an interim dividend of ₹15 per share, with the record date set to October 28.

IT services company L&T Tech today posted a 2.9% growth in net profit for the second quarter to ₹282 crore from ₹274 crore last quarter. Its revenue grew 4.5% sequentially in constant currency terms to ₹1,995 crore from ₹1,874 crore in the first quarter.

On a year-on-year basis, its net profits grew 22.6%, and its revenues grew 24%.

“We are proud to have achieved a $1 billion annualized revenue run-rate in Q2 on a constant currency basis. Our momentum stayed strong in the second quarter of the fiscal year with revenue growing sequentially by 4.5% in constant currency,” said Amit Chadha, the CEO and MD of L&T Tech.

The company upgraded its revenue guidance for FY23 from 13.5-15.5% to 15.5-16.5%, saying that despite the macro-economic uncertainties, the company sees customer investment continuing in its six big bet areas.

Recessionary concerns in Europe notwithstanding, Chadha said, “Deal bookings have been healthy especially in Europe where we closed a record high total contract value and have visibility of doubling our bookings this fiscal.”

L&T Tech said that it bagged a multi-million dollar deal from BMW Group to provide high-end engineering services for infotainment consoles in its hybrid cars.

Its net margins however remained under pressure, declining both sequentially and on a year-on-year basis. Moreover, its attrition rate worsened by 280 basis points sequentially to 23.2% during the quarter. Its net employee addition stood at 572.

Here’s L&T Tech’s Q2 in numbers:

Particulars	Q2 FY23	Q1 FY23	Q2 FY22
Revenue	₹1,995 crore	₹1,874 crore	₹1,608 crore
Net profit	₹282 crore	₹274 crore	₹230 crore
Net margin	14.1%	14.6%	14.3%

Source: Company reports

The company declared an interim dividend of ₹15 per share, with the record date set to October 28.

Segment-wise, transportation continued to grow stronger – it contributes to over one-third of the company’s revenues. It also emerged as the best performer both QoQ and YoY.

Vertical	Q2 FY23	QoQ change	YoY change
Transportation	34.5%	7.4%	25.2%
Industrial products	18.9%	2.5%	7.2%
Telecom and Hi-tech	19.4%	-1.3%	4.4%
Plant Engg	16.3%	4.6%	20.8%
Medical devices	10.9%	-2.3%	1.6%

Source: Company reports

Geography-wise, US and Europe continue to dominate with a share of nearly 80% in the company’s revenues. India’s share declined marginally during the quarter.

Geography	Q2 FY23	QoQ change	YoY change
North America	63.4%	4.0%	14.5%
Europe	15.9%	-0.1%	8.3%
India	12.8%	-0.3%	12.3%
Rest of the world	7.9%	9.5%	20.9%

Source: Company reports

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