L&T Tech shares jump as Q1 margins beat estimates
L&T Technology Services posted a 13% rise in first-quarter profit and expanded its EBIT margins, though analysts remain divided on the pace of a broader sector recovery.
L&T Technology Services shares jumped over 2% to Rs 3,487.60 on Wednesday after the engineering services firm reported a 13% increase in first-quarter net profit. The results, released after Tuesday's market close, showed operating revenue climbing 11.5% year-on-year to Rs 2,940.1 crore.
Underlying demand showed a more modest picture, with constant currency revenue growing just 2% year-on-year to $310 million. Total income increased 10% to Rs 2,969 crore, while total expenses rose 9% to Rs 2,493 crore. This cost discipline drove EBIT margins up 200 basis points to 15.7%, beating analyst forecasts.
The company secured six large orders during the quarter, including one exceeding $30 million, another above $20 million, and four above $10 million. Chief Executive Amit Chadha pointed to the firm's "Lakshya 31" five-year plan. He stated the company's aspiration of achieving a 13-15% CAGR over the next five years "reflects both the strength of our strategy and the confidence we have in our execution.”
Brokerages noted the strength in margins but flagged uneven sector demand. Nomura highlighted that growth was driven by sustainability and mobility verticals, up 4.3% and 2.3% quarter-on-quarter respectively, while the technology segment contracted 3.1%. The firm raised its target price slightly to Rs 3,180 while keeping a 'Neutral' rating.
Nuvama maintained a 'Hold' rating but cut its target price from Rs 4,000 to Rs 3,500. It noted: "Post-divestment of SWC business, LTTS has started FY27 with a decent performance and optimistic outlook. While we continue to like LTTS’s fundamentals, we believe the ERD industry shall take more time to recover from the current weak macro and headwinds in specific sectors (such as auto),"
Motilal Oswal retained a 'Neutral' stance with a Rs 3,400 target. It noted: "Demand commentary has slightly improved vs. the last few quarters, with better traction in the US and continued strength in Sustainability. However, Europe auto remains weak and clients remain selective on spending."
"While Q2 is likely to be better, we believe a few quarters of consistent execution will be needed. We now build in organic revenue growth of 3.5% YoY cc and total revenue growth of 5% YoY in USD in FY27,” Motilal Oswal added. These mixed reactions underscore the challenges facing the stock despite the strong margin expansion.
L&T Tech has lost roughly a quarter of its value in 2026 and trades down more than 24% over the past year, giving it a market capitalisation of nearly Rs 34,900 crore. Even after Wednesday's rally, the stock remains well below the highest consensus price targets. This suggests investors are waiting for clearer evidence of a sustained demand turnaround.
