L&T Tech Slips in Q1, But Is a 12.9% Return Still on the Table? Analysts Stick to ₹4,850 Target — Here’s Why

L&T Technology Services (LTTS) posted mixed Q1FY26 earnings, with revenue falling marginally short of estimates but profitability maintaining itself—all courtesy of solid growth in its sustainability business and a surging AI pipeline, reports a Choice Institutional Equities report. Despite escalating concerns over short-term turbulence, analysts have retained an “Add” rating, with a target price of Rs 4,850, implying a 12.9% total return from the current market price.

LTTS reported Q1FY26 revenue of ₹28.6 billion, which rose 13.6% YoY but fell 2.8% QoQ, below street expectations of ₹29.1 billion. Nevertheless, net profit was at ₹3.1 billion, registering modest sequential and annual growth, in line with the street estimates.

The EBIT of the company was at ₹3.8 billion with a margin of 13.3%, a marginal fall from the previous year but better than the last quarter by a hair.

"Q1 was a mixed bag, with headwinds in mobility and technology verticals countered by a phenomenal performance in sustainability," the brokerage added.

Interestingly, LTTS secured more than $200 million in big-ticket deals for the third consecutive quarter, and Sustainability now has surpassed a $100 million quarterly run-rate — reiterating it as LTTS's most lucrative segment.

AI as the Next Growth Engine

LTTS is doubling down on its bets on AI—launching 40+ AI agents and 6 in-house tools and applying for more than 200 AI-related patents during the quarter. The report says 30% of LTTS customers are already operating full-fledged AI programs. "AI-led demand, deal wins, and Intelliswift synergies are expected to drive recovery in H2FY26," the report further said.

Mobility Faces EV Pains

Though the mobility vertical was weak on account of EV caution and price pressures, LTTS's $50 million software-defined vehicle (SDV) contract and growth in automotive AI are likely to support recovery in the latter part of the year.

In spite of growing worries about short-term volatility, experts have maintained an "ADD" rating with a price target of ₹4,850, which translates to a 12.9% total return from the current market price.

Management is optimistic about achieving a mid-16% EBIT margin by Q4FY27, with better cost controls and scaling in high-margin segments.

Bottom Line:

Though Q1 did throw up some red flags with sequential softness, LTTS's strategic emphasis on AI, Sustainability, and high-value deals has retained investor faith — making it one of the top IT engineering bets to watch in H2FY26.

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