L&T Services (LTTS) Q3 25/26 earnings summary

Executive summary

• Q3 FY2026 marked a strategic pivot to high-margin, future-ready engineering intelligence solutions, with a focus on quality of revenue and portfolio rationalization.

• Large deal wins remained robust, with TCV between $180 million and $200 million for five consecutive quarters, and 50% of Q3 wins in the Mobility segment.

• The company is executing a five-year strategy (Lakshya) and expects to complete restructuring by March 31, 2026.

• Board approved unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2025, with limited review by statutory auditors.

• Financials reflect the impact of new Labour Codes, resulting in a one-time exceptional item of ₹354 million.

Financial highlights

• Q3 revenue was $326.3 million (₹29,235 million), up 4.6% YoY and 10.2% YoY in INR, but down 3.2% QoQ in USD and 1.9% QoQ in INR.

• EBIT margin improved by 120 basis points QoQ to 14.6%, with EBIT of ₹4,271 million.

• Net income for the quarter was INR 3,291 million, representing 11.3% of revenue.

• Free cash flow for YTD FY26 was ₹8,864 million, with a free cash flow to net income ratio of 91%.

• Cash and investments stood at INR 3,160 crores (₹31,600 million) and cash and cash equivalents at ₹14,279 million at quarter-end.

Outlook and guidance

• Guidance for FY2026 is mid-single-digit overall growth, with focus business areas expected to deliver double-digit growth.

• EBIT margin aspiration is mid-16% between Q4 FY2027 and Q1 FY2028, with continued improvement expected.

• Restructuring and portfolio rationalization are expected to be completed by March 31, 2026.

• Management will evaluate and account for further Labour Code impacts as clarifications emerge.