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News Topical, Digital Desk : L&T Technology Services (LTTS) initiated a major structural change effective April 2023, the effects of which are now clearly visible. The company reduced its previous five business segments to three major core segments. This strategy was called "Go Deeper to Scale." The objective was clear: increase revenue, improve margins, and focus on fast-growing sectors.
What has changed within the company?
Previously, the company operated in five segments—Transportation, Industrial Products, Communication & Media, Plant Engineering, and Medical Devices.
Now the company has converted them into 3 core businesses
Mobility – Largest business
Sustainability – Green and energy solutions
Tech / Hi-Tech – Digital and high tech business
Also 3 new horizontal focuses were created:
Engineering Intelligence (AI based)
Software & Digital Products
Digital Manufacturing
Full timeline
25 April 2023 – Announcement of major changes
FY24 – New reporting started
January 2026 – EPS guidance reduced by 30%
February 2026 – 6 Big Bets launched
March 2026 – SWC business sold
Selling SWC business meant
Smart World & Communication unit was 9.63 per cent of the company's revenue. But by selling it the company gave a clear message that now the focus will be on high-margin business and not on low-margin business.
What will the results be on April 22nd?
The company will announce its fourth-quarter results on April 22nd. The company's market cap is around ₹37,000 crore. The market expects stable performance in the results.
Rupee revenue is expected to increase 3% to ₹3,011 crore, compared to ₹2,923.5 crore in the previous quarter. EBITDA is expected to be ₹440 crore, compared to ₹427.1 crore in the previous quarter.
EBITDA margin is expected to be 14.6%, the same as the previous quarter. PAT, or profit, is expected to increase 18.9% to ₹359.5 crore, compared to ₹302.6 crore in the previous quarter.
What is the biggest question facing the company?
According to experts, constant currency revenue growth could be 0%. This means that real growth is not expected to be very strong. Management has previously stated that the company is focusing on profitable growth. As part of this strategy, "client pruning" and "restructuring" are ongoing. This means that the company is exiting less profitable or less valuable businesses.
Major decision in March
At the end of March, the company announced the sale of its Smart World and Communication (SWC) business for ₹452 crore. Interestingly, the company had acquired this business in April 2023 for approximately ₹800 crore. This means that it was sold at a lower price after just three years.
In FY25, the SWC business generated revenue of ₹1,027 crore, representing 9.6% of total revenue. Therefore, the market will now be watching the future impact of this divestiture.
Why is guidance being monitored?
The company had previously projected double-digit constant currency growth, but later revised it down to mid-single digits. Now, some brokerages believe that management may provide guidance for low-single digit organic revenue growth, especially after the sale of the SWC business.
Is margin the biggest game changer?
How the company manages margins in a difficult industry environment will be closely watched. The company has previously stated that it will aim to reach an EBITDA margin of 16.5% by Q4, FY27. Additionally, the company has launched a five-year "Lakshya" strategy from FY27 to FY31. This strategy will emphasize engineering intelligence. The company will shift its focus from low-margin businesses to more profitable and faster-growth areas. An EBITDA margin target of around 16% has been set for the medium term.
What are the risks?
If clients reduce research and engineering spending or minimize offshoring, the company could face pressure. LTTS stock has been sluggish for a long time. Now, April 22nd results, guidance, and management commentary will determine whether the stock will see a fresh rally or remain under pressure. A stay above 3500 is currently considered a key signal for investors.
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