Larsen & Toubro Technology Services reported a 1.5% sequential revenue growth in constant currency for Q1 FY27, with EBIT margins improving to 15.7%. The company noted growth in its sustainability and mobility segments, while the technology division faced some softness. Investors are monitoring the ramp-up of large deals and a potential recovery in the tech business from the second quarter.
Larsen & Toubro Technology Services (LTTS) announced its financial performance for the first quarter of fiscal year 2027, highlighting a steady operational trajectory. The company reported a 1.5% quarter-on-quarter increase in revenue on a constant currency basis. A notable development in this quarter was the expansion of EBIT margins, which reached 15.7%, a 50-basis-point improvement compared to the previous quarter. This margin growth reflects the firm's focus on operational efficiency and ongoing portfolio adjustments.
Segment Performance and Growth Drivers
During the quarter, the sustainability business remained a core contributor, supported by steady execution in industrial products and plant engineering projects. The mobility segment, which covers areas like rail, aerospace, and commercial vehicles, showed signs of recovery despite persistent demand challenges in the European market. Conversely, the technology segment experienced softer performance, which the company linked to delays in finalizing new contracts. Management has indicated that it expects growth to pick up starting in the second quarter, driven by the commencement of a large telecom deal signed during this period and other recent contract wins.
Deal Momentum and Future Outlook
LTTS reported total contract value (TCV) bookings of approximately US$100 million for the quarter. While some deal closures were delayed, the company expressed confidence that these will materialize in the coming months, which is expected to support revenue and margin expansion for the remainder of the fiscal year. Client engagement in areas such as software-defined vehicles, embedded systems, and connectivity remains active, providing a pipeline for future opportunities.
Financial Estimates and Market Context
Analysts at Prabhudas Lilladher have adjusted their growth expectations, slightly lowering the FY27 constant currency revenue growth estimate to 4.0% from 4.3%, citing a slow recovery in the technology segment and regional pressures in Europe. However, expectations for FY28 growth remain stable at 8.9%. Due to better-than-expected margin performance in the first quarter, the brokerage has raised its EBIT margin estimates for both FY27 and FY28 to 15.5% and 15.8%, respectively. The target price for the stock has been revised to ₹3,350, with a hold rating maintained.
Moving forward, investors will be closely tracking the actual execution of the large telecom order, the speed of recovery in the technology segment, and whether the company can maintain these margin levels despite broader macroeconomic pressures in key markets like Europe.