L&T Technology trims revenue growth forecast for current fiscal year

L&T Technology Services has revised its revenue growth projection for the current fiscal year due to extended decision-making processes and economic challenges. The firm, a subsidiary of the Larsen and Toubro conglomerate, now anticipates a 17.5-18.5 per cent growth in constant currency terms for this fiscal year ending in March, as opposed to its earlier forecast of a 20 per cent increase.

CEO Amit Chadha explained that while the long-term outlook for engineering research and development (ER&D) remains robust, they are currently facing delays in decision-making and additional challenges stemming from macroeconomic issues in various regions.

IT sector adjustments

This adjustment in guidance follows similar actions by prominent IT service providers like Infosys and HCLTech, who recently lowered their revenue expectations. These changes come in response to reduced client spending in key markets such as the United States and Europe, driven by concerns about a potential economic slowdown.

Despite the revised guidance, L&T Technology reported a consolidated net profit of Rs 3.15 billion ($37.85 million) for the second quarter, an increase from Rs 3 billion in the previous year. During the quarter, the company secured seven contracts valued at more than $10 million each across various industry sectors.

Strong revenue growth

The company also recorded a 4.6 per cent increase in revenue from operations, reaching Rs 23.87 billion for the quarter, driven by a 15 per cent growth in its core transportation segment. Notably, L&T Technology incorporated results from Smart World and Communication, a business it acquired from its parent company earlier this year, into the year-ago figures.

Despite the adjustments and challenges in the market, L&T Technology's shares closed 1.6 per cent lower before the announcement of the results, though they have still seen a year-to-date increase of 25.2 per cent, outperforming the 11 per cent gain in the Nifty IT index.

(With Reuters Inputs)