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L&T Technology Services Q2FY22 Conference Call Highlights

L&T Technology Services Q2FY22 Conference Call Highlights

Published on 20 October 2021 .Views 3 .Comments 0
  • Digital Engineering and Technology: 55% of revenue in Q2 vs 54% in Q1.
  • 25 patents filed in Q2- mostly in collaborative and intuitive space in Digital technology.
  • Q3 has some seasonality because of furloughs.
  • Revenue growth guidance in FY-22: 19%- 20% in USD terms.
  • EBIT margin for the quarter is 18.4% which is 5th consecutive quarter for EBIT margin rise. It rose mainly due to operational efficiencies and scale benefits.
  • Headwinds on the EBIT margin side: Improving economy will lead to more travel expenses, wage hikes due to increased demand, organic and inorganic growth going forward.
  • FY- 25 target for sustainable EBIT margin is 18%.
  • Employee Utilization target is 78% to 80% going forward.
  • FY-25 target for revenue run rate: 1.5 billion USD.
  • Transportation vertical has 19%+ EBIT margins. Going forward company is looking to expand the margins in the Hi Tech and Telecom vertical.
  • ER&D (Engineering Research and Development) Industry: In 2020, market size of the industry was 1.5 trillion USD. It is expected to grow to 2.6 trillion USD. In this area, the legacy systems will grow at 2% CAGR whereas digital component will grow at 19% CAGR (Compounded annual return).
  • In the digital domain in the transportation vertical- there are 3 areas: Connected (60% current investment), Collaborative (35%) and Intuitive (5%). Going forward only 30% investment will be done in the connected field while majority will go to the other areas.

Originally Published On: https://blog.investyadnya.in/lt-technology-services-conference-call-highlights/
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