L&T Technology Services (LTTS) saw its shares drop nearly 5% after reporting a 6% year-on-year decline in Q3FY26 net profit to ₹302.6 crore. Revenue climbed 10.2% to ₹2,923.5 crore, but a lower-than-expected outcome and revised FY26 guidance to mid-single digit growth prompted multiple brokerages, including Nomura and Motilal Oswal, to cut their target prices.
L&T Technology Services (LTTS) shares fell approximately 5% on Thursday, trading at ₹4,071 per share, after the company posted mixed third-quarter results and slashed its revenue growth forecast for fiscal year 2026. The broader BSE Sensex, however, managed a slight gain of 0.34%.
Financial Performance Highlights
LTTS reported a consolidated net profit of ₹302.6 crore for Q3FY26, a 6% decrease from ₹322.4 crore in the prior year. Profit also saw a sequential dip of 7.9%. This decline was partly attributed to a ₹35.4 crore provision linked to the implementation of new labor codes. Revenue from operations showed more resilience, rising 10.2% year-on-year to ₹2,923.5 crore, though it experienced a marginal 1.8% sequential drop. The company’s earnings before interest and taxes (EBIT) margin stood at 14.6% for the quarter.
The company’s revised guidance for FY26 now anticipates revenue growth in the mid-single digits, a significant markdown from its earlier double-digit forecast. This recalibration comes as LTTS strategically exits certain low-margin businesses in the US, Europe, and Israel, a move expected to impact about 5-5.5% of its total business.
Brokerages' Verdict
Following the results and guidance revision, several financial analysts adjusted their outlook on LTTS.
Nomura downgraded the stock to 'Reduce' and slashed its target price to ₹3,900 from ₹4,100. The brokerage cited a sharp revenue miss and the impact of restructuring actions. Nomura also reduced its revenue growth assumptions for FY26-28 by 340-750 basis points and EPS estimates by 3-4%.
Motilal Oswal Financial Services maintained a 'Neutral' rating but cut its target price to ₹4,500 from ₹4,800. The firm anticipates a near-term growth reset due to portfolio exits and regional rationalisation, projecting a USD revenue CAGR of 7.4% over FY25-FY28.
Emkay Global Financial Services reiterated an 'Add' rating but lowered its target price to ₹4,500 from ₹4,750. Emkay noted that while the near-term outlook might be challenging due to the revenue miss, expected recovery in revenue, improving margins, and more attractive valuations post-correction support their positive stance.
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