LTM Q2 Profit Slips 5% to Rs 1,398 Crore as Order Inflow Falls to $1.26 Billion

LTM, the Larsen & Toubro group IT services company formerly known as LTIMindtree, reported a sequential dip in profit for the September quarter on Friday, with a sharp fall in new deal wins taking some shine off steady revenue growth and stable margins.

Consolidated net profit for Q2 FY27 came in at Rs 1,398 crore, about 5% lower than Rs 1,466 crore in the June quarter. Part of that decline reflects a high base: the previous quarter included a one-time gain linked to the company's investment in Voicing AI, which did not recur.

Revenue and margins

Revenue from operations rose 1.7% sequentially to Rs 11,808 crore from Rs 11,608 crore. In dollar terms, revenue was US$1,235.2 million, up 1.1% quarter on quarter and 5.1% year on year in constant currency.

Operating profit, measured as earnings before interest and tax, increased 2.2% to Rs 1,839 crore, keeping the EBIT margin at about 15.6% versus 15.5% in the previous quarter. Holding margins steady while revenue grows slowly is a reasonable outcome in the current environment, where clients are cautious with discretionary technology spending.

The weak spot: deal wins

Order inflow fell to US$1.26 billion, down from US$1.68 billion in the June quarter and US$1.59 billion a year ago. That is the number most likely to worry investors, because deal wins drive revenue several quarters out. The drop echoes a pattern seen at some peers this earnings season, including Wipro, where large-deal bookings fell sharply.

AI is the growth story

Chief Executive Venu Lambu attributed the quarter's performance to the company's AI-focused strategy, saying revenue from its Enterprise AI and Business AI offerings together grew 47% year on year. The company also added a financial services client to its US$100 million-plus revenue bracket.

Across verticals, consumer business grew 8.6% year on year in constant currency, the production segment grew 7.4%, and technology and services rose 7%. Financial services, LTM's biggest segment, was almost flat at 0.4% growth. By region, North America, which contributes 74.3% of revenue, grew 4.8%, Europe 7.2% and the rest of the world 4.4%.

Headcount rose by 949 during the quarter to 88,835.

Dividend and stock

The board approved an interim dividend of Rs 25 per share, with October 23 set as the record date. The results came after market hours; the stock had closed 3.66% higher at Rs 4,390 on the NSE on Friday, as IT shares extended a rally, giving the company a market value of about Rs 1.30 lakh crore.

What to watch

The combination of steady margins and fast-growing AI revenue is encouraging, but the slowdown in financial services and the drop in order inflow are the two numbers to track. If deal wins do not recover in the December quarter, revenue growth in the second half of FY27 could stay muted, and the stock's recent rally may face a test when trading resumes on Monday.

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