LTTS shares in focus: Motilal Oswal seeks consistent deal execution before turning positive

Shares of L&T Technology Services Ltd. (LTTS) will be in focus on Wednesday, July 15, after the engineering services company reported better-than-expected June quarter earnings and reaffirmed its long-term growth ambitions under its Lakshya 31 strategy.

The company reported constant currency revenue growth of 1.5% sequentially, ahead of Street estimates of 1.1%. Its EBIT margin expanded 50 basis points sequentially to 15.7%, marginally above the estimated 15.5%.

Alongside its earnings, LTTS announced a strategic partnership with Anthropic to develop AI-powered engineering intelligence solutions for the products and manufacturing sectors.

Commenting on the outlook, CEO and Managing Director Amit Chadha said the company's aspiration of delivering a 13-15% CAGR over the next five years, while maintaining EBIT margins of 16-17%, reflects the strength of its strategy and confidence in execution.

During the quarter, LTTS secured one deal worth over $30 million, one deal above $20 million, and four deals valued at more than $10 million.

Among business verticals, Sustainability posted the strongest growth, rising 4.3% quarter-on-quarter in constant currency, followed by Mobility, which grew 2.3%. The Tech segment, however, declined 3.1%.

Geographically, North America grew 1.4%, India rose 0.9%, and the Rest of the World expanded 6%, while Europe declined 0.8% on a sequential constant currency basis.

Management indicated that growth is expected to improve in the coming quarters, although it acknowledged that a couple of large telecom and MedTech deals slipped into early Q2, delaying revenue recognition by a quarter.

The company also reiterated its Lakshya 31 targets of delivering 13-15% CAGR with EBIT margins of 16-17%, while reaffirming its goal of achieving a mid-16% EBIT margin by Q4 FY27.

Brokerages react to LTTS Q1

Following the results, Motilal Oswal maintained its 'Neutral' rating on the stock with a target price of ₹3,400, implying an upside of around 3% from Tuesday's closing level.

The brokerage said that LTTS' Q1 FY27 revenue, EBIT and adjusted PAT increased 11.5%, 28.1% and 17.4% year-on-year, respectively, in rupee terms. For Q2 FY27, it expects revenue, EBIT and adjusted PAT to grow 0.5%, 17.3% and 11.7%, respectively.

While management commentary has become more constructive, Motilal Oswal said it would like to see a few more quarters of consistent deal conversion and execution before turning more positive on the company's growth trajectory.

JPMorgan maintained its 'Neutral' rating on L&T Tech with a price target of ₹3,300. The brokerage said the company delivered a better-than-expected Q1 performance, with both revenue and margin exceeding expectations.

However, JPMorgan said that large deal wins slowed, with total contract value (TCV) at $100 million, lower than the roughly $200 million recorded over the previous six quarters.

Nomura also retained its 'Neutral' rating on LTTS, with a price target of ₹3,180. The brokerage described the company's Q1 FY27 performance as decent, with growth largely driven by the Sustainability vertical.

It highlighted that the 15.7% EBIT margin, up 50 basis points sequentially and 200 basis points year-on-year, came in ahead of its estimate of 15.4%.

LTTS shares ended 0.26% lower at ₹3,289 on Tuesday and have declined 25% so far in 2026.

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