L&T Services (LTTS) Q2 24/25 earnings summary

Executive summary

• Revenue grew 4.5% sequentially and 7.8% year-over-year in Q2 FY25, with broad-based growth across Mobility, Sustainability, and Tech segments.

• Secured multiple large deals, including two $20M+ and four $10M+ contracts, and significant empanelment agreements in Sustainability.

• Launched new brand campaign, introduced three new offerings, and appointed a Chief Business Officer for large deals and strategic initiatives.

• Filed 165 AI-related patents to date, with cumulative filings at 1,394.

• Segment reorganization from five to three (Mobility, Sustainability, Hi-Tech) effective April 1, 2024.

Financial highlights

• Q2 revenue: ₹25,729 million (₹2,573 crore), up 4.5% sequentially and 7.8% year-over-year; USD revenue at $306.7M (up 3.9% QoQ, 6.5% YoY).

• EBIT margin at 15.1%; Net income: ₹3,200 million (12.2% of revenue), up 1.3% year-over-year.

• EBITDA for the quarter was ₹4,660 million, EBITDA margin at 18.1%.

• Free cash flow for Q2: ₹417 crore; cash and investments at ₹2,849 crore post-dividend payout; cash and cash equivalents at ₹9,070 million as of September 30, 2024.

• Interim dividend of ₹17 per share approved; total dividend payout of ₹3,492 million during the six months ended September 30, 2024.

Outlook and guidance

• FY25 revenue growth guidance maintained at 8–10% in constant currency; EBIT margin aspiration for FY25 at 16%.

• Medium-term ambition: $2B revenue and 17–18% EBIT margin.

• H2 margins expected to be higher than H1, with large deal closures anticipated in Q3 and early Q4.

• Q3 expected to be soft for Mobility due to seasonality, but rebound anticipated in Q4.

• Operating segments reorganized to streamline structure and align with evolving industry verticals.