L&T Tech Q3 Results Review - Mixed Performance; Seeing Signs Of Softness In Certain Segments: Yes Securities
L&T Technology Services reported mixed financial performance for the quarter.
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Yes Securities Report
L&T Technology Services Ltd. reported mixed financial performance for the quarter. While, the revenue growth was below with estimates, Ebit margin came slightly above expectation.
L&T Tech reported revenue growth of 0.4% QoQ in U.S. dollar terms, led by transportation vertical (up 4.4% QoQ) and Industrial products (up 0.9% QoQ).
The Indian rupee reported growth of 2.7% QoQ was supported by depreciation of Rs by 2.9% QoQ versus U.S. dollar. There was sequential improvement in Ebit margin (up 51 basis points QoQ) led by control on other expenses. There was slight decrease in reported employee attrition as last twelve months attrition decreased by 80 bps QoQ to 23.3%.
The long term demand environment remains intact led by growing outsourcing of engineering research and development services. However, the clients especially in sectors such as hitech and medical devices have become cautious regarding the evolving macroeconomic situation leading to signs of demand softness in these segments and it poses near term risks.
Employee attrition is expected to come down in H2 FY23 and should support operating margin going ahead.
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