L&T Technology Services revises revenue guidance upwards to 24% for FY19

Mid-tier engineering services firm L&T Technology Services (LTTS) has revised its revenue guidance upwards for the second time in the ongoing fiscal year as the company sees rising demand for its services across various verticals apart from a healthy deal pipeline.

The company, which had revised its revenue growth guidance to 21 per cent in Q3 from 16 per cent, is now hopeful of posting 24 per cent annual revenue growth for this fiscal year. This is the second time in a fiscal year, the engineering services firm has revised its revenue estimates upwards.

"After posting healthy top line and bottom line in Q3, we expect to do better in the fourth quarter. That’s why, we are again upgrading our revenue guidance to 24 per cent for FY19 from 21 per cent given in Q3," said Keshab Panda, chief executive officer and MD at L&T Technology Services.

In the third quarter-ended December, LTTS reported a net profit of Rs 185.6 crore, growth of 47 per cent over the corresponding period of the previous fiscal year. In sequential term, it declined by 2.8 per cent owing to higher employee expenses. Its revenues rose 36 per cent on YoY basis at Rs 1,316.9 crore for the quarter. Sequentially, it grew 4 per cent in the December quarter. In dollar terms, revenues stood at $185.7 million, growth of 4.8 per cent over the previous quarter. “We have sustained the double-digit growth trajectory across all industry segments. This momentum gives us the confidence of exiting FY19 with industry leading growth once again,” Panda said.

With sound demand across verticals such as transportation, telecom & hitech, industrial products and process industry & medical devices with better pricing, company’s operating margins improved 30 basis points in sequential term to 18.4 per cent in the third quarter. On YoY basis, operating margin increased by 310 basis points. “Our deal pipeline continues to be strong with 8 multi-million dollar deal wings across industries in Q3,” Panda said.

L&T’s subsidiary said that it was investing heavily in new areas, such as setting up labs across the globe. The company, which has 48 innovation labs around the world, had set up 5G lab in Bangalore during the third quarter. "Our patent portfolio has gone up in Q3, with total patents of 363. Also, our current focus area is on developing a platform portfolio, which is going to be big for us in coming quarters," Panda said.