(Reuters) – Indian engineering and technology services firm L&T Technology Services reported a smaller-than-expected third-quarter revenue on Wednesday, on the back of softer spends from its automotive clients.
The Larsen and Toubro group firm raised its revenue growth for fiscal year 2025 to near 10% from 8%-10% earlier, on the back of acquiring U.S.-based software firm Intelliswift.
Its revenue rose 9.6% year-on-year to 26.53 billion rupees ($307.14 million) for the quarter ended Dec. 31.
Analysts had expected a revenue of 26.65 billion rupees, according to data compiled by LSEG.
The company’s mobility business unit posted a revenue growth of 4.1%, the slowest since the company started disclosing such numbers from the first quarter of this fiscal year.
Net profit fell 4.1% to 3.22 billion rupees, lagging an estimate of 3.32 billion rupees. Profit declined on higher sales and administrative costs.
Shares of the company closed 3.1% higher ahead of results.
KEY CONTEXT
Engineering, research and design (ER&D) services, which include technology support to industries such as transportation and communications, contribute a sixth of the revenue to India’s $254 billion technology sector.
Automakers have been facing issues of labour strikes in their factories across the globe while legacy players face the challenge of the shift to electric vehicles. Analysts said this would impact quarterly earnings for L&T Technology.
Last week, peer Tata Elxsi’s shares tumbled 7.6% as it missed revenue estimates.
PEER COMPARISON
Valuation (next Estimates (next 12 months) Analysts’ sentiment
12 months)
RIC PE EV/EBITD Revenue profit Mean # of Stock to price Div yield
A growth(%) growth(%) rating * analysts target ** (%)
L&T Technology Services 33.99 21.89 13.09 14.34 SELL 27 1.01 1.03
Ltd
Tata Elxsi Ltd 40.47 28.83 9.32 8.36 SELL 13 0.95 1.18
KPIT Technologies Ltd 24.42 27.07 17.20 21.02 BUY 15 0.78 051
Tata Technologies Ltd 28.46 31.29 11.41 15.71 HOLD 10 0.90 1.06
* Mean of analysts’ ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** Ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCT-DEC STOCK PERFORMANCE
($1 = 86.3780 Indian rupees)
(Reporting by Sai Ishwarbharath B; Editing by Mrigank Dhaniwala)
