L&T Services (LTTS) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue reached ₹24,619 million ($295.2M), up 7% YoY but down 3% sequentially, with net income at ₹3,139 million, up 0.8% YoY and down 8% QoQ; results reviewed by auditors with unqualified reports.

• EBIT margin was 15.6%-16.6%, net income margin 12.7%; operational performance impacted by revenue seasonality and ongoing investments.

• Large deal wins included two $30M, two $15M, and three $10M+ contracts, with strong momentum in Mobility and AI-led solutions; pipeline is double last year’s level.

• Segment structure reorganized from five to three: Mobility, Sustainability, and Hi-Tech, effective April 1, 2024.

• 75,466 equity shares allotted on exercise of employee stock options during the quarter.

Financial highlights

• Q1 revenue: ₹24,619 million ($295.2M), up 7% YoY and down 3.3% sequentially; constant currency growth was 6.1% YoY.

• EBIT for the quarter was ₹3,836 million; EBITDA was ₹4,562 million, down 9.3% QoQ and up 0.7% YoY.

• Gross margin at 29.3%, EBITDA margin at 18.5%, EBIT margin at 15.6%-16.6%, net income margin at 12.7%.

• Free cash flow for YTD FY25 was ₹12,509 million; cash and investments at ₹17,310 million at Q1 end.

• Dollar revenue: $295M, offshore mix improved to 58.9%.

Outlook and guidance

• FY25 revenue growth guidance reaffirmed at 8%-10% in constant currency; H2 expected to outperform H1.

• EBIT margin aspiration maintained at 16% for FY25; margin trajectory expected to improve in H2.

• $1.5B aspirational run rate for FY25 includes potential M&A; 8%-10% guidance is organic.

• Pipeline is robust, with more large deals ($40M-$50M) expected to close in the next two quarters.